The current situation in the banking industry:
Bank/financial technology company relationship is winning/win cooperation win-win: this relationship helps the bank to provide its customers with a convenient service that they will take years to develop and help financial technology companies scale their businesses, providing cheaper services to customers.
In fact, the opportunities for cooperation between banks and fintech companies generate revenue for both sides, but very few banks participate in this development opportunity.
Among the banks and credit institutions that intend to cooperate with financial technology companies, 86% give priority to the goal of "improving customer experience", followed by about 4 out of 10 people who mentioned cutting operating costs or eliminating fraud.
Only about half of the importance of "expanding a new product and service" is the top priority.
The obsession with having to "improve customer service" is growing mad. As I have stated before, mid-sized financial institutions can never spend enough budget to keep up with customer experience compared to market banking empires.
It is also completely inappropriate to prioritize cutting costs and eliminating fraud. Developing the partnership/scaling takes time to implement and enforce while banks need to reduce costs and eliminate fraud immediately.
All of the reasons for a bank's partnership with a fintech company are so far-fetched that this is an opportunity for them to generate revenue and differentiate themselves from other large banks.
Intend to cooperate with fintech companies
Banks often have two problems related to paying bills:
Why is this a problem to be addressed? Because paying bills on a bank's websites and apps allow banks to help customers make smarter financial decisions, which will drive loyalty and growth. between the bank and the customer.
But how can banks offer invoice payment recommendations if their customers don't pay bills on their websites and apps?
The truth is they can't. And in the past few years, they have not been successful in stopping the direct bill payment trend.
That is the reason to start a new strategy. Why not partner with a financial technology company like BillShark to help customers cut a portion of their bills, save them and generate a portion of the bank's revenue.
Radius Bank has cooperated with a fintech company startup since October 2018. Chris Tremont, an employee who proposed an online banking value solution, declined to comment on the benefits of the bill negotiation service or the revenue it brings to the bank, but said the bank goods "satisfied this cooperation".
People get tired of the "subscription economy" but the reality shows that the average American subscribes to 3 services (this is the average, that is, more than half use more than 13 services). This is hard to control, how to keep track of them all.
While there used to be a few mobile payment companies that could track these subscriptions, it is only affiliated with partner banks and is currently only available in Europe.
Minna Technologies cooperates with major banks like Swedbank, Spare Bank to unify the process to help users manage all subscriptions including:
Minna plans to test a premium model with one of their partners. However, it's easy to see the prospect of consumers willing to pay fees so they won't run into the trouble of shutting down and unsubscribing to some units. In addition, this cooperation also helps the bank to reduce customer service costs.
Manage registration in the mobile payment application
In fact, one of the banks that Minna is working with receives tens of thousands of calls in a month to unsubscribe or request reimbursement and settle disputes. This action, they claimed, reduced their customer service costs by $ 5 million.
It is frustrating and painful when we are the direct impact of a data breach. Of course, customers will be very upset to think "all my data is in there".
The consequences were obvious when a data breach occurred. A new Breach Clarity website and service has managed this, it is more efficient and pleasing to both the customer and the bank. The mobile payment company studied a lot of US public reports based on more than 1000 factors, then scored each violation and provided users with recommendations on what they should do. The only problem, however, is that users are not able to check the site every week to see what breaches have occurred and what action should be taken.
Banks take the protection of users' identity seriously, consider their financial health, and take measures to strengthen the safety of their digital websites and apps.
According to the AARP: "Over the next 25 years, consumers will turn over nearly $ 48 billion to their heirs and charities."
Banks see this problem in two ways:
These banks are right and both will happen, but by focusing too heavily on wealth management the bank is wasting the rare opportunity: managing the transfer of assets.
Two fintech startups, Atticus and Trust & Will have a plan to take full advantage of this opportunity. They choose to use affordable pricing for probate, immigration and real estate planning services. The bank's partnership with fintech has helped them accumulate a new line of revenue.
The number of transactions on Bitcoin, Ethereum and cryptocurrencies, in general, skyrocketed in early 2020, after only a month it peaked and held a steady level as the Covid epidemic broke out from March to May.
Invest in cryptocurrency (Bitcoin, XRR,..)
About 1 in 10 American adults own a cryptocurrency, and half of them use it for goods and payment services. The more invested a cryptocurrency is, the greater the benefits to Square. Bitcoin revenue from its Cash Pay application in Q1 2020 was $ 306 million, up from $ 65 million in Q1 2019. This also prompted many guest fintech companies like PayPal to prepare a plan. new about cryptocurrencies through their application.
While many banks try to prevent customers from buying cryptocurrency by using their card issued. The trend of investing in cryptocurrencies raises the question of banks, not only regarding the permission to use their tokens but whether they should offer additional financial services related to investing money electronically or not.
The Office of Monetary Computation (OCC) could be opening the door for that:
“ National banks have the right to provide fiat bank accounts and cryptocurrency custodial services to crypto businesses. This could open the door for larger financial institutions to provide bank accounts for crypto companies, as well as to actually provide monitoring services for customers ' private keys ”.
Although this has been discussed many times, raised and then put down many times, but should the bank participate in this deal?
Many fintech analysts believe that banks do not have a culture of innovation. But this is not the reason that the real culprit is the troubled decision-making and ineffective investment approval process. Proposals for a bank's new products and services must meet a high ROI and create a revenue barrier at many banks.
What banks need is a decision-making and investment process to finance lots of "single products" - products that will attract thousands (perhaps tens of thousands). Previously, this was not feasible because the cost of building new products was high.
The world is different today, banks don't necessarily have a “culture of innovation” - they need to value partnerships with fintech companies, working together as a way to diversify (and increase enhancement) their services and revenue streams.