Fintech Part 3 - Consumer Experiences and Financial Services Disruption

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With consumers’ needs and desires increasingly being at the forefront of new innovations and disruptions, the trend will likely be for services to be guided by the wants and needs of consumers. This will impact the future of money, transactions, markets, and marketplaces.

One of the central trends will be the disaggregation of financial services provided by banks. Instead of having to rely on one service provider to fulfil all needs as a consumer, consumers will be able to pick and choose from the best options to suit their needs. The consumers who are most likely to want the freedom to choose specific ‘micro-services’ from different providers and not be tied down to one service provider for all their needs are likely to be millennials and small- and medium-sized enterprises (SMEs).

Technology and digital solutions are currently, and will continue to become, more mainstream, which is an important realisation about the current state of financial services and the direction in which disruptions are pushing financial services. The days of referring to e-banking are nearly over, and the imminent reality will be that all financial services will be offered digitally. The impact of this shift to mainstream digital financial services will be that providers will no longer offer digital services in addition to their core functions. Instead, their core functions and offerings will become digital. Only a small fraction of the technologies and innovations that will make this possible are understood at this moment in time, and society inches closer to the future of money, markets, and marketplaces with every innovation and disruption.

The transformation from a physical banking presence and relationship with clients, to a digital relationship with clients, will be a big challenge. Currently, many clients who would identify themselves as primarily digital, rely on branches or relationship management for some degree of comfort. 

As more business is transacted through mobile, the challenge will be to keep the same brand ‘trust’ and client-centered approach, through a digital channel, rather than on a face-to-face relationship.

I expect to see banks, certainly in the next 10 years, retain a physical presence and I don't think branches go away entirely. However, the number of them; the square footage; what gets done in them; the automation inside of branches, together with mobile, will fundamentally change the methods of communication with clients. 

The current reality is that banks have the capacity; they have the clients, and they retain a modicum of brand trust. The challenge will be to transform that into the digital world.

Steve Barber
Managing Director of Bridging Finance Solutions

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