How legacy banks can avoid being overtaken by fintechs
Across the world, neobanks and fintechs like Revolut, Monzo, and Wise have publicly announced they will be aggressively chasing small business customers instead of retail clients. Fintechs are transforming how financial services are delivered and have leapfrogged traditional banks by making lending easier, cheaper, and quicker to obtain. They also offer a high level of transparency when it comes to interest rates combined with high standard customer service and user experience. By running effective marketing campaigns and being inclusive in terms of being open for underserved markets like the middle east and underserved customers such as SMEs, they are at the forefront of financial services and have been growing at a rapid rate.
Traditional banks have for a while been concerned about fintechs taking over a large chunk of their market. For both consumers and SMEs, the conventional way of using SWIFT to send money is too slow, expensive, and non-transparent. Fintechs have increased customers’ expectations with their customer-focused mindset. Today’s consumers have more options, more knowledge and more power than before. Banking institutions that think ahead should instead see the fintechs as an opportunity to move ahead of the competition. Partnering up with them is an excellent opportunity for legacy banks to offer cross-border payments that are fast, cheap and reliable.