Will fintechs replace traditional banks?
Noel McLaughlin replies:
When fintechs first disrupted the market, offering solutions to customer demands for simplified processes, 24/7 remote access, faster transactions and virtual consultation, the future of traditional banking was uncertain.
The younger generation were quick quick to adopt to this new way of banking. However, what was once a tech-savvy alternative for daring millennials is now a constantly evolving financial service that consumers of all ages are willing to use.
While fintech start-ups successfully infiltrated the market, the established banks remained the financial institution of choice. However, traditional banks have been embracing fintech’s presence. In order to maintain their primary position, banks have incorporated fintech services into their own business or invested capital to develop in-house IT solutions for traditional services.
By investing in the development of new technology, banks have greater flexibility in the way they interact with clients and are able to place more focus on roles which add value to client experience and relationships. However, despite many millennials seeking a more virtual way of banking, there is a continued demand and preference for the availability of in-person touchpoints. Direct client communications help build valuable relationships, foundations which both retail and private-wealth banks are traditionally built upon.
At Butterfield, our dedication to relationship management is a significant advantage when dealing with our clients’ complex and individual requirements.
Fintechs interact with clients through digital channels, with customers needing numerous apps to manage all their financial needs.
Traditional banking and wealth services, such as those offered by Butterfield, provide these services under one organisational umbrella, meaning the clients benefit from service consistency as well as the reassurance of banking with a highly regulated bank. Both fintechs and traditional banks have their share of strengths and weaknesses and the future of banking does not belong solely to either one.
The ideal solution is a blend of direct and virtual touchpoints, with the focus on improving the customer experience.