As the final year of the teens begins, financial services are at a pivot point that will determine their success in the 2020s. Simply, they must innovate to survive and reposition how they deliver financial products and tools to their customers.
For the most part, bankers are stuck with an outdated model of what a bank does, and they can’t seem to envision a different, better way to deliver services. Today’s consumers and businesses, on the other hand, are embracing an economy that relies on central marketplaces to deliver suites of services that fit their needs.
Amazon has become the one-stop shop for retail. The Apple Store and GooglePlay provide mobile apps for every possible application anyone could want on their phone – games, productivity apps, navigation, and office apps all share space in one marketplace. By being companies founded on trust, they were able to achieve unwavering success. Banks have this same type of trust in protecting the hard-earned dollars of business and individuals they employ.
While fintech startups are trying to dazzle customers away with the promise of solving the annoying gaps in how financial services are delivered today, banks could be putting these together with the trust factor they have earned.
But in 2019, banks can redefine their role in financial services. In addition to providing what has become a commodity – checking, savings and investing basics – banks can cement their value with their most profitable customers by becoming a one-stop shop for the financial tools and technology they need to prosper.
The flip side to all this innovation is that it has become difficult to sort through all of the options to find the best solution. But banks are in a unique place to serve as a fintech marketplace and provide trusted advice on which services will truly help a customer – whether it is retail or corporate – to thrive.
While many banks think that becoming a fintech marketplace is far too complex to take on, they need to be reminded that this model of business has already been accepted vastly across other business settings. In order to create a marketplace that is successful for customers, banks really only need three things:
- The trust of their customers
- A strong customer base
- The will to create a functioning marketplace
Banks already have the first two things, so all that truly needs to be accomplished is the latter.
Imagine something as simple as revamping a bank’s business banking strategy. Most banks will offer business checking or savings accounts, along with some basic accounts receivables services, such as a lockbox or payment processing. But what if they could also help solve a significant challenge, for example, streamlining the accounts receivables process and eliminating the manual work many companies put into reconciling payments with customer accounts. There is likely a fintech tool that can save this customer time and money.
But the company may not even know it exists. They don’t know to ask for it, so the bank never offers it. Allowing for bank customers to work with their bankers to evaluate options in a fintech marketplace can enable quicker integrations and technology that is at the ready for customers whenever they may need it.
Now this will certainly call for an adjustment or two when it comes to the way banks think about their business, but a transition like this allows for banks to prepare early for the major innovations that shake up the industry every year. Each innovative addition turns into a stepping stone allowing for banks to become the trusted resource their customers rely on to meet their financial goals.