6 things traditional banks can learn from new banks and fintech companies
When it comes to personal finance, banks continue to act as a one-stop shop for the consumer and are often the main point of contact. Additionally, traditional banks have physical distribution networks that can provide an excellent multi-channel experience. On the other hand, neo-banks and fintech companies offer a whole new customer experience and are part of the logic of the digital revolution. They are readily available as users do not need to visit a branch or queue to fill out paperwork in order to use banking services. Thanks to a sophisticated banking application, everything is fully digitized and accessible in just a few clicks. Traditional banks need to step up their game in this technologically advanced world.
Flexible cloud infrastructure
Neobanks and fintech companies are using smart AI-powered cloud solutions to efficiently store and manage data and support applied analytics, which is difficult for traditional banks to do. With these technologies, banks can create a flexible infrastructure that allows all staff to easily access customer and account information. Better customer knowledge, increased productivity, innovation, agility and even a lower risk of data theft are the results. Traditional banks can accelerate cloud adoption and offer their customers more flexible financial services by collaborating with start-ups.
Advanced security and transparency
Traditional banks have major security and transparency concerns. Fintech companies and neobanks are backed by data security rules to protect consumer information and guard against unauthorized access to accounts.
Neobanks keep their consumers informed about payments and transactions in real time, demonstrating their transparency. Additionally, they provide information on additional charges and penalties the customer may face in specific circumstances.
Neobanks and Fintechs use encryption technology, biometric verification, two-factor authorization, and role-based access management to stop fraud and cyberattacks, thereby securing banking transactions for customers.
Neobanks and Fintechs are challenging the conventional banking system by using artificial intelligence and technology to provide users with a variety of online banking solutions. Neo banks have an automated front-end and back-end process that not only lowers the cost of operations for banks, but also completely eliminates the possibility of human error.
Therefore, traditional banks could automate a number of operational tasks such as loan administration, account opening and document verification using AI-powered tools.
Improve the customer experience
Traditional banking online platforms are quite outdated, use outdated technology and do not provide a pleasant user experience. Neobanks and Fintech companies offer 24/7 customer service using AI-enabled chatbots with their user-friendly design, cutting-edge technology stack, and intuitive mobile app. Traditional banks should opt for a better balance between revenue and customer orientation.
These fintech companies also prioritize customer feedback and customization needs, which benefits them.
Ease of use
Neobanks and FinTechs have the technological advantage and know-how to support effective consumer-focused programs. Instead of using digitized solutions that could strengthen them in the financial market, traditional banks spend a large part of their budget on maintaining their outdated legacy systems.
Thanks to the partnership between traditional banks and neo-banks, traditional institutions have increased their user-friendliness with more powerful online services and applications that are easy for customers to understand and use. improve all aspects of the services provided.
Lower fees, higher rates
Neobanks and fintechs have lower operating costs because they have fewer employees and fewer physical branch networks. The lower rates and no monthly payments resulting from their branchless business model are usually passed on to their customers. One of the top five reasons to switch to digital-only readers is to get better pricing.
The opinions expressed above are those of the author.
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