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Years ago the average consumer looking to make financial transactions would have had very few options – the big banks left very few choices.
In the age of financial technology that’s not the case anymore.
Next week is Banking Horizon, one of Europe’s largest conferences for retail banking and financial services, and the scale of choice in the market today is highlighted at this event.
Along with executives from fintech firms like N26 and Monzo, speakers will include members of the top teams at Santander and Barclays.
In an industry that’s rapidly changing the biggest financial players are now not necessarily the best for consumers. Here are three reasons why:
1) The Impact of the Crash in 2008:
When the financial crisis of 2008 happened a lot of trust in the biggest banks was lost.
Many consumers felt that bankers had been playing games with their lives, and the bonus payments that many high level bankers received added insult to injury for those who had lost out.
The crash showed that the biggest banks had taken their customers for granted.
Financial services start-ups entering the market since the crash are acutely aware that customers approach financial services with caution- so they need to provide the best services possible.
As the founder of myVentureCapital put it, these new entrants into the fintech market are finding alternative, friendly avenues to make money rather than exploiting the returns of their clients.
2) The Conventional Banks Are Determined to Catch Up:
If the big banks were providing the best services for their customers before the recent fintech revolution then they wouldn’t feel the need to innovate.
However, the opposite is true. Since the innovation of financial technology banks have been determined to catch up on the start-ups that have already stolen a march on their sector.
Some banks have begun innovating internally, whilst others have been acquiring fintech start-ups to add to their offering.
Take Santander for example. At the Horizon Conference being held in London next week attendees will hear from Sigga Sigurdardottir, the Chief Customer and Innovation Officer at the Spanish banking giant. By innovating internally they can give their customers a bespoke service.
In contrast, credit card giant Capital One has recently acquired mobile price tracker Paribus to add to its other acquisitions, including Bundle, BankOns and Adaptive Path.
3) The Impact of SaaS:
Software as a Service (SaaS) has enabled innovation at lightning speed for startup financial companies.
Where large banks will have an in house team of developers working on their complicated legacy systems, smaller, challenger financial companies are able to provide similar, and in some ways better, services because they are using a proven flexible, modular platform.
SaaS allows these challenger financial companies to build upon a ready made infrastructure to support their growth, allowing them to enter the market much quicker, and any updates or regulatory changes (including the upcoming PSD2) are included in their monthly subscription fees.
In addition to SaaS providing the ability to get to market quicker, it often costs a lot less than a bespoke platform would cost, thereby allowing these challenger companies to pass on these savings to their customers.
At Trusek our SaaS platform is providing a powerful fintech solution for businesses across the spectrum, from charities and banks.
Our consultative approach is gaining traction in an industry becoming increasingly crowded.
If you would like to get in touch with us for more information about how we can help with your banking platform or proposition, whether an established bank, an emerging bank, a community bank, a credit union or even a new concept bank, email hello@trusek.com or call 020 7048 0470
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