The 2020s are going to be an era of FinTech revolution all around the world. One only needs to refer to some basic statistics online to realize that fact. Covid-19 is no doubt one of the biggest tragedies of our generation but all crises’ resolutions bring change and this time at least, I think we all can agree the change is fundamental and permanent.
No one is going to give up remote working altogether once we are done with the whole pandemic situation. The interesting thing is it’s not like no one ever thought people would ever have the option of remote jobs. Yes, it was a fleeting fantasy for most of us but were we really that surprised when we found out it was a perfectly viable alternative, and in some cases an even better option? No, I don’t think so.
However, going into 2021 we definitely will be seeing innovations in FinTech that will catch us by surprise. Though, for now, we will be talking about a relatively recent phenomenon: remote banking. A technology that is set to disrupt $4.7 trillion worth of global financial services (International Trade Administration, USA). And this is only the beginning. Digital-only banks have been popping up all over the world contesting for market share.
They are highly appealing to customers because they have no physical offices and hence no personnel costs. Not only do people find everything at arm’s length exceptionally convenient, but they’re also all for lower fees and higher interest rates on deposits. Digital-only banks are leveraging the cloud to essentially reduce capital expenditures and gain flexibility over traditional banks with their on-premises infrastructure.
However, at this point, digital-only banks despite having immense potential are still in a niche market and there are a number of reasons for that. In an age where financial fraud is the leading internet crime worldwide, it is fair to say that consumers are concerned about the security of their financial information that’s only going to be stored online. And rightly so, since Symantec, a leader in cybersecurity stated that one major bank’s cybersecurity team would be larger than the total headcount of all the digital-only banks combined.
While no physical presence has a big convenience factor, it also means that in case of disagreement or confusion or fraud, a consumer cannot just storm the nearest branch and resolve the matter in person.
Traditional banking usually has terrible online services and consumers would quickly lend that misperception to digital-only banks as well since they only exist in the digital realm. The only way to counter that is the need for digital banks to provide all the financial services that traditional banks offer as well as actively promoting the superiority of their customer experience. Being top-notch in their applications and support system is a given, of course. The other alternative they have is coexistence.
Digital-only banks in partnership with traditional banks will help cover all aspects of customer experience and give customers the option to choose based on their preferences. However, it is important to note that traditional banks looking to stay young with the times need to have separate branding for their digital-only arm for enough differentiation to attract consumers.
While remote jobs have been blooming, “remote banking” has seen some stagnation in the form of meeting challenges but it is still early stages and there is ample time for the digital transformation to reach its peak.