Perhaps one of the greatest contributions of Fintechs has been to fuel the fire of competition by captivating their customers with a different digital experience.
In recent years, Fintechs have made headlines in multiple print and digital media because they were the forerunners of some radical changes in financial paradigms. Concepts such as "digital experience", "financial inclusion" or "360° customer vision" allowed them to take a leap of faith to gain a share of the market in the midst of the revolution that is taking place as a result of the digital transformation of companies. This is why Fintech can be seen as one of the driving forces that has driven, and will undoubtedly continue to drive, this transformation.
Perhaps one of the greatest contributions of Fintechs has been to fuel the fire of competition by captivating their customers with a different digital experience. 100% digital processes, new technologies and payment methods or information provided in a user-friendly way and in real time are some examples of this new experience. This competition is what has mobilised the financial sector and generated a new cycle in which transformation must necessarily be permanent because it is essential to be ahead (or at the same level as the competition) both to retain and gain market share.
This has meant that the digital experience, as well as new technologies, are no longer enough. Behind the experience there must be a real value contribution to the customer's needs. When a customer goes to a branch or a digital channel to apply for a mortgage or a loan, they do so because they actually chose an instrument that is being offered by a bank or a fintech. But their real need is to buy a house, a car or maybe take a trip. What happens is that customers had to learn technical terminology from banks for years in order to understand the instruments available to them. Customers adapted to the banks. On the other hand, fintechs adapted to customers, simplifying terminology, messages and the way of contracting products and services. They generated a new experience but at the same time provided value.
Despite the above, it still happens very often when talking to customers that the "key" difference between fintechs and banks turns out to be central bank regulation. "We are not the same" is often heard. "We are regulated and they are not. But it turns out that most of the time customers don't have that detail, they don't know exactly what the difference is, they don't know what a banking licence is and they probably don't care to know. What they are looking for are solutions and for them what they have in front of them is a set of applications installed on their mobile phone that provide them with certain functionalities and capabilities. To the extent that there is trust in these "Apps", the one that provides the best solution (be it a bank, a fintech, a digital bank or a mix of all of them) will win the prize.
It is not surprising then that an ecosystem of collaboration between Fintechs and financial institutions has started to emerge. Because it is difficult to be good at everything and compete in everything; because by contributing synergies it is possible to achieve that 1+1 is more than two and above all because by joining forces it is possible to expand the market instead of fighting for the same share that everyone wants to have. This is where the future lies: in specialisation and collaboration. Banks become a sales channel for fintechs and fintechs become a differential within the catalogue of solutions provided by financial institutions. They are no longer competitors; they are customers/suppliers; they invest in each other; they are strategic partners. Those who act in isolation will have to make a huge effort to avoid being left behind in this never-ending race. Because it is also becoming quicker and easier to compare. Customers can do it all from their mobile phone in a couple of minutes. Why should they stick to one option when it is so easy to see what the competition has to offer? Why not choose or use the best of each?
The future of Fintech is undoubtedly bright.