The financial services industry is undergoing a paradigm shift. For financial institutions to stay relevant and keep pace with FinTechs, they must do “whatever it takes” to beat the tech startups, including acquiring them, Aquaa Partners CEO says.
The line between FinTechs and traditional financial companies has never been less clear. While established financial institutions lead the way, FinTechs have cemented their place in the ecosystem and helped change the tides of banking. The new benchmark in economic and digital performance and customer engagement across channels are inexorably led by FinTechs and challenger banks.
While lines are blurring, FIs need to do more to embrace the changes from FinTechs. A report by the World Economic Forum found that just 28% of the more than 30,000 millennials surveyed trust their banks to be fair and honest. As a result, it’s easy to see how traditional banks are hardly the first port of call when customers are looking to make a bank account. Neobanks, on the other hand, are transparent and strive to provide real-time notifications, therefore scoring higher than FIs. In fact, of 47,000 banking customers surveyed by Accenture, 17% preferred digital banks in 2019 – a figure which grew to 23% in 2020.