A thriving financial ecosystem predicated on digital services is steadily growing. The world, too, has experienced the true essence of digital transformation earlier than anticipated, with more people constantly using digital services since the onset of the COVID-19 pandemic.
Findings Based on Enablers and Challengers
It is evident that the financial industry is adversely affected. Recent research indicates that contactless payments have grown by 330% in a year. The general public can now access financial services via digital wallets and social media payments, as well as platforms targeting gig economy workers.
There are fintech startups that are creating the infrastructure necessary for the most innovative financial solutions to be implemented and to support all the new disruptive products, fintech startups are providing the infrastructure it takes to make them a reality.
Fintechs play a payment enabler role, ranging from fraud and authentication tools to Open Banking APIs. Despite this, without much visibility and operating behind the scenes, fintech can still have a profound impact by democratizing financial technologies and opening up access to financial services for more companies.
Challenging Vs. Enabling
While fintech companies work behind the scenes, their primary role is not to disrupt themselves, but to provide solid foundations for other companies to improve their services or experiment with new solutions. The services empower the renewal of old processes as well as improve the services provided by legacy financial institutions such as the big banks which have been trying to meet the market’s needs for years.
Aside from that, the development of modern regulations around Open Banking has now created an ideal scenario for technology providers to offer access to financial data behind the scenes. This also gives access to frontline fintech companies focusing on customer demand, presenting a tremendous opportunity for the development of new financial products that meet the specific needs of consumers. However, traditional institutions can also benefit from these technologies by reinventing themselves, simplifying processes, and improving the user experience.
In short, the goal here is not to undervalue the current financial system or to diminish what has already been accomplished, but rather to connect the whole ecosystem, challenge and enhance what has already been achieved by these institutions. All these changes can allow the financial industry to expand and provide more business opportunities in a way that greatly benefits society. The more solid and robust the platforms become, the more sophisticated products will be offered, increasing demand for innovative open finance solutions.
As organizations adopt digital business models, they must ensure that everyone and everything can interact with what they have to offer. It’s not just about embracing the Internet-of-Things or even having mobile applications. In this fast-paced world, it’s about enabling the right payment ecosystem for your digital business that provides stakeholders with the relevant information.