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Half of banking customers now using fintech

Thor Olavsrud | Nov. 16, 2016
A new report finds half of banking customers around the globe are now using financial technology products or services from at least one fintech firm, but customers also put much more trust in traditional financial institutions.

The fintech effect

These trends are putting pressure on incumbents to adopt new strategies to respond to the challenge posed by fintech firms. Sullivan notes that until recently, most traditional financial institutions felt fintechs wouldn't affect them at all. But that's changed: 60 percent of financial institutions now view fintechs as potential partners, and 59.2 percent are actively developing their own in-house capabilities inspired by fintechs. Executives in traditional financial institutions are also exploring investment in fintech (38 percent), partnering with educational institutions (34.3 percent), setting up accelerators (29.6 percent) and acquiring fintechs (18.6 percent).

The traditional financial institutions are giving the highest priority to investments in technologies that facilitate more streamlined and effective operations, with an eye toward providing better day-to-day customer experiences. Nearly 90 percent of executives said they were most focused on implementing big data and analytics. About 56 percent said they're focused on the internet of things (IoT), while others concentrate on blockchain (54.7 percent), robotic process automation (52.3 percent) and open API technologies (50 percent).

"Both fintech and traditional firms still have work to do on delivering a better customer experience," Vincent Bastid, Secretary General, Efma, said in a statement earlier this month. "The arrival of fintechs has accelerated the improvement of overall customer experience in the industry, but it is still not at the level that customers perceive that it should be. It is only a matter of time before big tech companies [like Apple, Google, Facebook and Amazon] and players in ecommerce and telecommunications join in to stake their claim to benefit from this industry disruption."

 

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