New technologies are disrupting the Financial Services industry. Some might refuse to change their investment methods but the increasing number of millennials as the workforce is ensuring the technology shift in every industry. FinTech has not only remained a future but is already here. Recent times have witnessed the introduction of technology solutions that have completely changed the ways the consumer interacts with the Financial Services and improved overall consumer experience.
The transformations in the operations of financial services have brought in changes in nearly every area of financial services. The ways to acquiring the customers have changed which has raised the need for the Financial Services firms to pay a third party FinTech firm or develop the FinTech capabilities internally. The FinTech partners even help these Financial Services firms to address the customer needs sooner than before and are constantly increasing their own customer base everyday.
As the world is moving towards a place where everything and every device is connected via internet i.e. Internet of Things, the usage and spends or we can say every activity of a customer is being recorded by electronic devices. Each day, around 2.5 quintillion bytes of data is generated all over the world. And these numbers are expected to grow even more in the near future. Using this data, the interested parties can divide the customers according to age, gender, online behaviour, economic status, and geographical coordinates and find the sweet spots of customers which are suitable for certain financial product depending on the behaviour of that specific group which again is found using data analytics.
The FinTech firms can even analyze spendings of the various customer groups and also have the information on the type of products they like to opt for. So they can even connect the Financial Services firms with the right set of customers with a suitable product. Although the major Financial firms are trying to develop their own FinTech based services, some FinTech firms have gotten so far ahead of the others, that the others feel a need to opt for their services. These situations have resulted into converting these companies into major Financial Services firms as these FinTech firms have themselves started lending etc.
Overall, the FinTech players have completely changed the landscape of the Financial Services firms and completely transformed the operations in the industry. But the major change is that they have made these operations customer friendly which ensures the demand for the FinTech services.
The other areas in which these FinTech firms have improved the financial services industry are risk management, compliance capabilities and many more which we will cover in later articles.