“A disturbance or a problem which interrupts an event, activity or a process”. The waters of traditional business models are being stirred up by the emergence of newer more convenient technologies. Banks and financial institutions are at the end of the pointy stick when it comes to that, and are already applying a number of different strategies to adapt and thrive, or else succumb to the harsh reality of inevitability.
Disruption, disruption, disruption; that is all you hear when trying to keep up with the constant information flow on a day-to-day basis. However the question arises; What is really meant by that?
The world is getting impatient, and the problem here is that most banks and institutions run on legacy systems, which become redundant or obsolete, however will still need maintenance. Therefore IT teams will have to allocate precious time on maintaining, fixing and updating such systems; leaving no time at all to spend on customer experience and technological convenience.
Said disruption activity mainly comes from FinTechs and Startups. These dilute traditional practices through a number of ways:
- Social media Banking; transactions are made through AI on different social networks.
- Faster account set up and friendlier UIs.
- Reduced costs in relation to customer acquisition as well as creating innovative and creative services which catch on quick
- Younger generations of tech savvy individuals leading the way through creative ideas within different industries.
- Certain services are offered at a cheaper rate which makes it attractive.
- Open minded approach to experimenting with new ideas.
- Customer oriented approach where products are developed with the client in mind.
- More time and resources allocated into research – things get done faster with less bureaucracy.
Surprisingly enough, banks have started to shift their outlook on these emerging FinTech company in a much better light. A 2016 International Data Corporation (IDC) research showed that most banks see FinTech companies as potential collaborators or can even have the potential to be acquired and implemented, as seen below.
Therefore we can see that even with all of this disruption going on, there is a silver lining in the mentality of financial institutions to collaborate and even acquire technology from the young and innovative.
To learn more about acquiring, partnering, showing off your startup or just a great time networking and establishing connections; join me and our band of merry folk at our annual Phoenix FinTech conference this September in Prague!