As August approaches, bankers should be aware of the access and insights VenCent Fintech Summit will provide related to what’s happening in the banking industry, especially around financial technology.
The financial services sector is undergoing significant transformation, which highlights the mutual dependence between traditional banking institutions and fintech firms. For the sake of continuity within their respective industries and in order to maintain their relevance, it’s crucial for both sides to meet early and often.
THE BANKER’S PERSPECTIVE
The last three years have radically changed how we as consumers participate in payments and financial transactions, and with that, swift changes have been made by institutions wanting to remain competitive.
While these digital changes are somewhat expected, another change has taken place: a renewed interest by customers to work with bankers they know personally. It’s an understandable side effect as banking is now often a digital encounter, rather than a trip to the local bank branch. As it is frequently stated, it is important for banks to remain the trusted financial advisor for their customers.
So in this digitized age, banks continue to rely on tools that offer ease of access, reliability and security for their customers while preserving that signature customer experience. With more than 28,000 financial technology (fintech) companies in the world, banks no longer have to worry about building their own solutions. They can find partners in sound companies that understand their challenges and have proactively built thoughtful technology for filling those service gaps.
ACCESS TO FINTECH SOLUTIONS
In 2015, The Venture Center opened its doors to approach business, technology and everything in between from a different perspective. We wanted to give our city, and the wider world, a unique place where education, innovation, and collaboration could happen between highly qualified professionals in their fields.
Since then, we’ve worked with more than 100 young fintech companies to ensure they have every tool necessary to outlast the thousands of startups that fail each year – whether that’s due to misreading market demand or running out of money. Proof that what we’re doing is working… 94 percent of the startups we’ve worked with have succeeded, compared to the 90 percent failure rate most startups encounter.
We’ve seen first-hand the benefit of the transfer of knowledge between bankers and innovators through our award-winning programs, like the FIS Fintech Accelerator. Participants have access to resources and relationships that support rapid growth and long-term success.
PARTNERSHIPS BUILT ON TWO-WAY COMMUNICATION
When banks develop partnerships with the right fintech companies and fintech founders listen to bank leaders about challenges they’re facing, the gap between the digital world and reality is breached and equilibrium is achieved. In this way, fintech partnerships give banks access to all of the best sides of technology while still preserving the necessity of real, interpersonal relationships with customers as well as the safety and soundness that are necessary in banking.
Here are some tangible ways fintechs are helping transform and stabilize the financial services industry:
● Cybersecurity – Fintech companies are providing banks with modern cybersecurity tools to keep customer data safe. As more banks create apps with all the features of a physical branch, there’s been a surge in online hackers trying to steal this valuable data. It’s an all-out war with news of breaches coming out regularly, and we see fintechs taking the lead and equipping banks to keep customers’ money and personal information safe.
● Loan Availability – Partnerships between fintechs and banks are expanding the availability of loans essential for business expansion. Individuals seeking home loans, car loans, etc. also benefit by acquiring crucial start-up funds needed to bring their ideas to market. Using alternative methods like safer platforms, purchase points, and social media scores, new pathways are created for anyone who might not have previously qualified for a conventional loan.
● Data – Fintech and banking apps are combining forces to serve easy-to-understand data, empowering customers to track their spending, savings and overall financial health. While banks have historically held a significant quantity of information about their customers, the focus of data expertise offered by fintechs now makes it possible for that data to produce real collective value.
● Payments – Fintechs are clearly prioritizing improvements to payment systems, and they’re leading the way. While the path forward isn’t clearly defined just yet, they’re looking ahead to optimize real-time payments. Their target is developing safer, simpler, and more accelerated technology to make immediate payments more ubiquitous.
Last year, the inaugural VenCent hosted more than 400 participants from banking and fintech companies from around the world. As a force for social and economic growth for our city, The Venture Center is excited to see how this innovative networking event will shape the future of banking and fintech partnerships on a global scale.
Editor’s note: Collins Andrews is The Venture Center’s FIS Executive in Residence and is a board member of the Little Rock-based organization. The opinions expressed are those of the author.