The past year has seen a massive expansion in fintech (financial technology) to support the delivery of financial services to consumers, businesses, communities, social sectors and even parts of government.
The pandemic turned the quiet and slow pace of adopting fintech solutions on its head. From the simplicity of contactless payments, the rise of distanced personal banking, and switching to e-commerce business, we are seeing more rapid changes now than at any time in the history of technology-enabled finance. For instance, take:
Contactless Payments
It is difficult to imagine not using contactless payments these days. With the increase in spending limits, more and more purchases are being made through contactless. A recent statistic* for the UK indicates contactless payments accounted for 33% of all credit card and 43% of all debit card transactions. And when it fails (as it did recently when I went to my local grocery store), the prospect of having to find the cash to pay for items feels really strange.
Distanced Personal Banking
With people restricted to their homes, visits to traditional brick-and-mortar banks and building societies have plummeted. Instead, there has been a surge in the use of online banking for payments and receipts, as well as “virtual banking.” A number of providers are offering virtual appointments with personal banking advisors and mortgage brokers. As a result of the combination of the stamp duty holiday and people wanting to change lifestyle, find more space, etc, home purchases leapt in 2020 to the highest figure since August 2007.**
e-Commerce Business
e-commerce was once thought of as mostly related to the consumer market, however, that has changed dramatically. With restrictions on face-to-face business interactions, more businesses are turning to e-commerce models to deliver their products and services. Many traditional bricks and mortar businesses – including (no pun intended) the building sector – are now offering e-commerce solutions to their B2B customers.
Digital Banking
Thanks to advancements in banking technologies, artificial intelligence (AI), biometrics, open banking and cybersecurity, digital banking is more convenient than ever, with users now able to access a wide range of financial information and execute important tasks with just a few taps of their smart devices.
Financial Services Challenges
A tech-first approach is now the only approach to deliver successful financial services. How banks, lenders and building societies leverage the plethora of new technology (RPA, Blockchain, Chatbots and Biometrics, are just a few) in an adaptive, agile and scalable manner, while at the same time transforming their legacy services, is a delicate balancing act.
Take a simple example: A bank wants to enhance their online services, adding personal banking services (loans and finance management) to their existing online range. To be able to deliver the service and the customer experience needed (i.e. extended hours of availability), they have to manage all of the back-end processes in a much more restricted and controlled manner. This means transforming numerous legacy processes – automating and orchestrating system interactions – to deliver the required services.
If technology is implemented incorrectly, then there could be a severe, negative impact – not only in terms of being able to deliver the new service but a knock-on effect in the form of consumer trust. Something no business can afford to lose…especially at this time.
Here at MDB Service Consulting, we have deep and extensive experience in helping finance organisations successfully develop and transform processes, automating services and delivering exceptional business value.
To find out more, take a look at www.mdbsc.co.uk.
Martin Summerhayes
Head of Digital Transformation Services at Ortom8 & MDB Service Consulting Ltd