Historically, large banking institutions have always been a bit of a laggard when it comes to innovation, delaying innovation to see what succeeds within smaller institutions or businesses. Only once success has been proven, decide to roll out the new innovative feature or technology to their huge customer base.
This strategy, however, is no longer sufficient and this fact must be understood and acknowledged. With the introduction of challengers and disruptors, these institutions must up their game and experiment if they are to remain relevant. It takes the relevant tools to ensure that relevance is achievable.
THE GROWTH OF CONTACTLESS PAYMENTS
The pandemic has changed many aspects of people’s daily lives, one of them being how they pay for their goods. Covid-19 has accelerated the use of contactless payments and other digital financial services. The pandemic has essentially made branch banking unnecessary, there is no longer a need to walk into a branch to do any form of banking when you can just do it all from the comfort of your own home. The pandemic has taught us that to stay relevant and keep pace with challengers, institutions need to innovate and scale quickly.
CHALLENGING THE CHALLENGER
Long before the pandemic, banks were struggling to deal with quick challengers to create new customer interfaces, streamline the customer experience, and modernize both their front and back offices.
Customer demands have changed dramatically since the pandemic, and if banks don’t act quickly to keep up with them, they could very well become useless in the near future. Below is a list of suggestions on how incumbent financial institutions can defend against disruptors:
1. Act now
Many fintech companies have become even stronger as a result of the pandemic, so it’s more important than ever to act now. The competition is tough and if banks don’t act now, they will slowly but surely lose their customer base to fintech disruptors.
2. Prioritize innovation
Many banks are still stuck using outdated technology and infrastructure. By prioritizing innovation efforts, banks can stay relevant and attract new talent. Now is the time to explore new options to improve the customer journey.
Banks need to explore other sources of growth. Banks should seek to compete with their competitors, even those who are not even banks. For example, the lending space has seen recent evolution due to a shift in customer demand, institutions are finding new opportunities to create value through a “buy now, pay later” system.
To conclude, today’s competitive business arena offers tremendous growth opportunities for those who can meet the ever-increasing demands of customer expectations, fierce competition, and pressure on margins. A business needs relevant support and tools to help them overcome these challenges by providing a one-stop payment and issuance platform that is tailored to meet your specific needs and grow as your company evolves and develops.