#Ally Financial is not just an auto lender any longer. In fact, according to the bank’s CFO, Chris Halmy, the bank is in a transitional phase #from a “pure auto lender to a broader leader in digital financial services.” During the Financial Outlook Update this morning, Halmy emphasized the bank’s focus on expanding new products, […]
Bank Innovation
#Zelle, the peer-to-peer payments platform formerly known as clearXchange, will put #customers #back in #banks’ #hands, PNC CEO Bill Demchak said Friday. P2P has been a notable success of nonbank players such as PayPal, which offers a host of consumer-facing payments products, perhaps most notably Venmo. In October, PayPal CEORead More
Bank Innovation
Two #days, 10,000 #customers, and a steady trickle of five-star reviews later, and the #launch of mobile finance management app #Clarity #Money appears to have had a good start toward its goal of giving consumers with more power over their financials. “There’s nothing like it on the market, and that’sRead More
Bank Innovation
Small steps, big leaps – be it working out, learning a new language or investing. That’s the inspiration behind #Stash, a mobile investing platform that allows users to invest as little as $ 5 that announced $ 25 #million in Series B #funding this morning. The round was led by Valar Ventures, oneRead More
Bank Innovation
#Walmart, in partnership with Green Dot, today announced “Prize Savings,” a cash rewards savings program conducted through its Walmart #MoneyCard product. Walmart and Green Dot, which issues the retailer’s cards, partnered with national organization Commonwealth on the offering, a firm which has created PLS (Prize-Linked Savings) programs that have generatedRead More
Bank Innovation
In Malcolm Gladwell’s book “David and Goliath: Underdogs, Misfits, and the Art of Battling Giants”, Gladwell asks his readers to reframe the classic biblical battle of David and Goliath. Rather than say David won despite his disadvantages in height and size, he argues David’s disadvantages should rather be seen asRead More
Bank Innovation
U.K.-based foreign exchange app #Revolut is shutting down its #cards in countries #outside the European Economic Area (EEA), including the U.S., Bank Innovation has learned. The move is said to be temporary. In the past few weeks, Revolut #customers across the world received notifications that their cards will be inactive beginningRead More
Bank Innovation
#Half of #banking #customers across the globe are #using the products or services of at least one #FinTech firm1, according to the first #World FinTech #Report (WFTR) from Capgemini and LinkedIn, in collaboration with Efma.
The inaugural report quantifies and tracks customer response to the rise of FinTechs, includes the views of financial services industry executives at both FinTech #firms and traditional financial institutions2, and summarizes how innovation is key in the emerging industry landscape.
In particular, the WFTR found that FinTechs are gaining momentum and mindshare amongst younger, tech-savvy, and affluent customers. Emerging markets led the adoption where over 75% of customers in China and India report using services provided by FinTech firms, followed by the UAE and Hong Kong.
FinTechs have made the greatest inroads in investment management, where 17.4% of customers rely on them solely and another 27.4% use them in addition to their traditional providers. With so many FinTechs specializing in niche services, the WFTR also found that many FinTech customers (46.2%) are using services from more than three FinTech providers.
While FinTech providers continue to have a disruptive market presence, overall customer trust levels in these providers remain low. Only 23.6% of customers say they trust their FinTech provider compared to 36.6% for traditional firms. Customers noted traditional financial institutions still hold some advantage over FinTech providers when it comes to fraud protection, quality of service, and transparency.
“Rising customer expectations for more personalized and advanced digital experiences, advancements in #technology, greater access to venture capital, and lower barriers to entry have created fertile ground for growing FinTechs,” said Penry Price, Vice President, Marketing Solutions, LinkedIn. “FinTechs are largely gaining momentum by meeting needs traditional players have yet to address, but many FinTechs lack the transparency required to earn the trust of their consumer audiences to capitalize on these opportunities.”
Traditional financial institutions continue to face challenges, with less than half (44%) of executives confident in their FinTech strategy. This is not surprising given only about one-third (34.7%) affirmed they have a well-structured or proactive innovation strategy in place that is embedded culturally. The risk-averse nature of traditional firms also makes it difficult for them to create cultures that prioritize innovation, and 40.3% of executives said that theirs is not conducive to innovation.
“Financial services senior executives are seeing FinTechs in a whole new light as they see greater opportunities to collaborate, but are also making significant headways in building more agile, in-house FinTech capabilities.” said Thierry Delaporte, Head of Capgemini’s Global Financial Services Business Unit and Member of the Group Executive Board. “But with the exception of a handful of industry leaders, most firms are struggling to achieve positive results from their innovation initiatives with only 10 percent of executives stating they have been very effective at achieving desired innovation results.”
The WFTR found that traditional firms are increasingly pursuing a wide range of strategies in response to FinTechs. A majority of financial institutions (60%) now view FinTechs as potential partners, but nearly the same percentage (59.2%) are also actively developing their own in-house capabilities. Beyond partnership and in-house development, executives are exploring a full range of models, whether it be Investment in FinTech (38%), partnering with educational institutions (34.3%) or setting up accelerators (29.6%), while a much smaller percentage (18.6%) are acquiring FinTechs.
Traditional firms are in large, part responding to this shift by giving highest priority to investment in technologies which facilitate more streamlined and effective operations, thereby providing better day-to-day customer experiences.
Nearly 90% of executives report they are most focused on implementing big data and analytics, followed by the Internet of Things (IoT) (55.8%), #blockchain (54.7%), robotic process automation (52.3%), and open API technologies (50%). Blockchain technology, which forms the backbone of the popular virtual currency #bitcoin, is increasingly penetrating the financial services industry. It has numerous applications including enhanced transfers of digital assets, identity management, and better management of reward and loyalty solutions.
“Both FinTech and traditional firms still have work to do on delivering a better customer experience,” said Vincent Bastid, Secretary General, Efma. “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 BigTech3 companies and players in e-commerce and telecommunications join in to stake their claim to benefit from this industry disruption.”
To help traditional firms overcome their innate resistance to innovation and address current and potential future disruption, the WFTR has defined a four-step framework which will be essential in the face of a growing number of prospective threats to the financial services business.
According to the report, traditional FS firms can unlock innovation by: discovering new technologies, devising ideas and insights into business models, deploying aligned executives to support innovation, and sustaining innovation by improving efficiency and implementing best practices. As the “platformification”4 of the industry continues to gain momentum, it will be more and more imperative that financial institutions take aggressive action to innovate to ensure they are prepared.
The post World FinTech Report 2017: Half of Banking Customers Globally Now Using FinTech Firms appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
In the Age of Information, companies that have made #data their business are getting more competitive as they seek to tame the mountains of available data into useful, actionable insights and answers. The #banks have the data. #Fintech startups want it, and argue it is better for #customers, but of course,Read More
Bank Innovation
A recent report by the survey software provider SurveyMonkey indicated that #mobile downloads for the bank had dropped 7.7% since the cross-selling scandal broke, while the other megabanks saw increases. So, while Chase, BoA, and Citi saw growth within the expected range for their app downloads after the scandal, onlyRead More
Bank Innovation
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