Fintech reshaping how companies and consumers interact

Fintech is a dynamic segment at the intersection of the financial services and technology sectors where technology-focused start-ups and new market entrants innovate the products and services currently provided by the traditional financial services industry.

According to the PricewaterhouseCoopers Global FinTech Survey 2016 shows that a high level of disruption triggered by fintech is already beginning to reshape the nature of lending and payment practices.

Fintech is riding the wave of disruption with solutions that can better address customer needs by offering enhanced accessibility, convenience and tailored products.

The survey also forecast that over the next decade, the average financial service consumer profile will change dramatically as the Baby Boomer generation ages and Generations X and Y assume more significant roles in the global economy. 

The latter group, also known as “Millennials” (those born between 1980 and 2000), is bringing radical shifts to client demographics, behaviours and expectations. Its preference for a state-of-the-art customer experience, speed and convenience will further accelerate the adoption of fintech solutions. Millennials seem to be bringing a higher degree of customer centricity to the entire financial system, a shift that is being crystallised in the DNA of fintech companies.

Banks are moving towards non-physical channels by implementing operational solutions and developing new methods to reach, engage and retain customers. Traditional banks may already have many of the streamlined and digital/mobile-first capabilities, but they should look to integrate their multiple digital channels into an omni-channel customer experience and leverage their existing customer relationships and scale. 

Moreover, the survey shows that the major trends for fund transfer and payments companies are related to both increased ease and security of payments. Mobile smartphone adoption is one of the drivers of changing payments patterns. 

End users also expect a consistent omni-channel experience in banking and payments, making digital wallets key to streamlining the user experience and enabling reduced friction at the checkout. Finally, end users expect all of this to be safe. 

Security and privacy are paramount to galvanising support for nascent forms of digital transactions, and solutions that leverage biometrics for fast and robust authentication coupled with obfuscation technologies, such as tokenisation, are critical components in creating an environment of trust for new payment paradigms.

According to the survey, the vast majority of respondents from traditional financial institutes believe that part of their business is at risk of being lost to standalone fintech companies. The banking and payments industries are feeling more pressure from fintech companies.

Fintech companies are not just bringing concrete solutions to a morphing consumer base, they are also empowering customers by providing new services which can be delivered with the use of technological applications. The rise of “digital finance” allows consumers to connect to information anywhere at any time, and digital services can address their needs in a more convenient way than traditional nine-to- five financial advisers can.

Disruption of the financial service industry is happening and fintech is the driver. It reshapes the way companies and consumers engage by altering how, when and where financial service and products are provided. Success is driven by the ability to improve customer experience and meet changing customer needs.