How has Fintech Disrupted the Traditional Banking Systems

Fintech is revolutionizing the traditional banking systems and driving growth.

Fintech or financial technology, has become a common buzzword in the financial services industry. It has changed the entire scenario of the traditional financial ecosystem around the globe. The development of technologies acted as a catalyst for the growth of the fintech industry. Fintech companies have undergone relentless technological innovations, which have made them more ambitious, advanced, and creative. The most successful implications of fintech are witnessed in the banking systems.

For about three decades now, consumer behavior has been heavily influenced by the fintech disruption of the traditional banking systems. Even the local vegetable vendor and the pharmacist use QR scan codes to get the payments from the customers. The current regulatory fintech environment has opened unprecedented opportunities for businesses and customers. Gone are the days when the transactions included only cash and long queues in banks. With easy and affordable access to technology, financial services have become efficient and can cost-effectively move money and information in real-time.

Ways in Which Fintech is Changing the Banking Industry for Consumers

Open Banking:

Currently, the banking industry is abandoning the brick-and-mortar system and adopting a fully digital ecosystem. The latest digital banking trends provide banking services completely over mobile apps and websites, including the ability to pay for in-store purchases directly from the customers' devices. Several banking applications also aid its users in investing in crypto and stock and help manage their financial portfolios. Since relying heavily on technology can raise issues about cybersecurity, fintech has enabled banks to integrate blockchain technology into their systems to enhance security.

Smart Solutions:

With the growing dependence on technology, customers are looking for solutions that are easily accessible, robust, and flexible. To satisfy the needs and of the customers, the banking industry looks up to fintech solutions, that have developed defined and effective solutions to take over those segments that have been neglected by the traditional systems earlier. Personal finance tools and issuing online loans to customers are some of the major advantages of implementing technology in banking.

Banking in the Cloud

Cloud computing is emerging as a major player in enhancing customer satisfaction. The advantages of using the cloud in banking are becoming more evident. Fintech companies can choose the public cloud facilities provided by Microsoft or Amazon, and other private cloud facilities, tap into both, and create a hybrid cloud system for the customers. Implementing cloud technology also drives down implementation costs and other operational expenses.

Real-time Access to Data

With the help of disruptive technologies, banks are generating enormous amounts of data about the customers and recent market trends to keep up with the modern financial ecosystem. A centralized, enterprise-wide storehouse of data is of immense value. The value is intensified by business analytics tools that provide business institutions with actionable insights to interpret customer management solutions and historical trends.

The Future of the Banking Industry Fueled by Fintech

Analysts believe that in the future fintech will replace traditional banks as customers are more satisfied by the online facilities. Being able to access a plethora of information using a pocket-sized device and a handful of applications has truly changed the perspectives and habits of the customers. Financial technology is offering an assortment of invaluable tools that are helping businesses save time, money, and effort. It is analyzed that, the traditional banks will continue to acquire smaller fintech companies to accelerate their digital transformation and strength technical capabilities.