The Future of Fintech Companies
Perhaps one of the most important inputs to Fintech companies has been the chance to stoke the fire of improving their ability to captivate their customers with a new digital experience.
Fintech companies have been the subject of reports in many digital and print outlets in recent years, because they were the precursors of some radical changes in financial paradigms. Concepts like “digital experience,” “financial inclusion,” and “360-degree customer view” allowed these companies to make a leap in confidence and gain market share in the midst of the revolution created by the digital transformation of companies. This is why we can point to Fintech companies as one of the motors that have carried forward the transformation, and will certainly continue to do so.
Perhaps one of the most important inputs to Fintech companies has been the chance to stoke the fire of improving their ability to captivate their customers with a new digital experience. Completely digital processes, new technologies and forms of payment or information, with friendly, real-time interfaces are a few examples of this new experience. This ability is what has mobilized the financial services sector and produced a new cycle in which transformation must be constant because businesses must keep moving forward (on pace with the competition) to retain and gain market share.
The result is that the digital experience and new technology are no longer enough. A meaningful investment in customers’ needs must underlie the experience. When a customer seeks out a branch or a digital channel for a mortgage or a loan, she does so because she has actually chosen a tool offered by the bank of a Fintech company. But her real need is to buy a house or a car, or maybe take a trip. The thing is, for years customers have had to learn technical banking terms to understand the tools being offered to them. Customers have adapted to banks. In contrast, Fintech companies adapted to their customers, simplifying terminology, messaging, and the ways that products and services are acquired. They created a new experience, but they also added value.
Even so, it is still true that discussions with clients raise the issue that the key difference between Fintech companies and banks turns out to be the regulations of central banks. You hear it often: “we aren’t the same thing. We are regulated and they aren’t.” But the truth is that customers usually don’t know about this detail, they don’t know what the difference is; they don’t know what a banking license is, and probably don’t even want to. What they are looking for is a solution, and what they have in front of them is a set of apps on their phone that offer certain functions or abilities. And as long as they trust these apps, then the one that offers the best solution (whether it is a bank, a Fintech Company, a digital bank, or a blend of all three) will take the prize.
There is nothing strange in the fact that an ecosystem has begun to grow in which Fintech companies and financial institutions work together. Because it’s hard to be good at everything and compete in everything; because by creating synergies one plus one can be more than two; and especially because by working together you can grow the market instead of fighting for the same piece of what everyone wants. That’s where the future can be found: in specialization and collaboration. Banks become a sales channel for Fintech companies, and Fintech companies become a differential in the catalog of solutions offered by banks. They are no longer competitors, they are clients-providers; they invest in one another, they are strategic partners. Those who go it alone will have to work much harder not to fall behind on this endless treadmill. Because every day it also gets easier and faster to compare. Customers can do so on their phone in a couple of minutes. Why would they stick with a single option when it is so simple to see what the competition offers? Why not choose the best of what each has to offer? The future of Fintech companies is undoubtedly promising.
In our opinion, Fintech companies will begin to play a fundamental role in creating synergies with other industries in the next few years. Not only driving the digital transformation of these industries, but also offering business objectives that can strengthen connections to customers, create new products, and even reinvent brands in the face of a market as challenging as Argentina.