Trust is something that takes a lot of time to build. Banks have won the trust of their consumers over the many years they have operated. When it comes to finances, people are reluctant to try something new immediately after being introduced by the banks.
FREMONT, CA: Fintech is transforming the way banks used to work. Payments and financial services are evolving with technological advancement. UPI is now one of the most preferred payment methods for both P2P and P2M transactions. Online commerce has become more convenient because of payment solution companies and their products. While all of these have benefitted customers to a great extend, banks are still struggling to cope with the towering change that fintech has given birth to.
Let us look at some prominent challenges for banks and fintech to work together:
Impacting Consumers with a Lack of Exposure to Technology
These technical shifts may work wonders for tech-savvy consumers. But, there is a large portion of the population without much exposure to technology. It is utterly important to address those consumers who are not well-acquainted with technology. Several modes of everyday bank transactions may seem complicated to these consumers. Also, it is not compulsory for banks consumers to open accounts only if they have financial and technological knowledge. Therefore, fintech and banks may find this as a significant challenge to work together.
Trust is something that takes a lot of time to build. Banks have won the trust of their consumers over the many years they have operated. When it comes to finances, people are reluctant to try something new immediately after it gets introduced by the banks. It is often a common case that a solution provided by fintech is not instantly accepted by many. For instance, customers still prefer the old-school method of banking over UPI when doing larger value transactions.
Banks May Face Increased Tech Dependency
Over the years, many manual works have shifted to automated processes. But manual processes still thrive at the core. Some processes, along with legacy systems and their regulatory framework, make it difficult for banks to adopt new technologies. It may require a ton of effort to implement changes. Fintech bodies are fully customer-driven. Their motto is to make it as easy as possible for a customer to perform all their financial activities. Therefore the partnership between customers and fintech can lead to a complete transformation of how traditional banks work while increasing tech dependency for the banks.