Many fintech companies are startups that embrace the mobile economy and use technology to streamline traditional banking services. By creating solutions that serve customers better and faster, fintech is earning a market share from traditional retail organizations. That’s because fintech companies heavily emphasize mobile and web systems to create more efficient, customer-friendly outcomes.
Fintech startups win over modern consumers by appealing to their specific preferences. For example, consumers don’t find it necessary to work through a bank to take out a loan, transfer funds or withdraw cash. The fintech industry is full of services that offer better service thanks to cutting-edge tech—and charge lower fees than traditional banking solutions.
There is no immediate threat to retail banks, but fintech companies will eventually surpass them. In fact, banks could lose over 60% of profits to fintech companies in the next 10 years. To stay relevant, retail banks—whether or not they use debt collection software—should keep tabs on the biggest players in the space.
Consumers expect mobile payment options. Yoyo Wallet meets consumer expectations by making mobile payments quick, simple and secure. Yoyo Wallet doesn’t store card information, and it connects with debit cards, credit cards and Apple Pay. On top of it all, it offers a rewards program to make money go further. In an age of cybersecurity concerns, Yoyo Wallet shows how cashless payments could work safely.
Wealthfront offers low-fee investing using algorithms that optimally allocate funds, eliminating the high charges consumers would normally pay to an investment advisor for fund management. Robo-investment startups like Wealthfront and others make it possible for people to deposit funds, establish goals and never have to worry about the details.
Investing online or via a mobile phone can be a tough concept for consumers to wrap their minds around. But, it is a trend that is on the rise. With over $1 billion in assets, Wealthfront is showing traditional investment firms that consumers are demanding a new way to do business.
Alternative lending companies are emerging worldwide, but there is one growing faster than the rest in the UK—Zopa, one of the largest peer-to-peer lending services. Peer-to-peer lending allows unrelated individuals to lend money without going through a traditional bank.
Since 2005, Zopa has provided customers with low rate loans for borrowers and high returns for lenders. Lenders who use Zopa don’t pay fees or face a maximum limit. That’s popular with consumers: Zopa offers almost $1 billion of loans annually. This kind of acclaim poses a threat to traditional lenders, who struggle to compete on the rates peer-to-peer lenders offer.
International money transfers have a history of slow service and high fees. Despite that, the need to transfer money is stronger than ever. In fact, according to SIMPLE, global wire transfers total $1.5 trillion daily. International lending startups are stepping in to simplify and regulate the process.
For example, TransferWise provides real exchange rates and mid-market rates. It commits to transparency, next-day transfers and outstanding customer support—all without high fees. This challenges a lucrative source of business for traditional firms.
Did you know there are two billion people in the world with no bank account? dopay provides an alternative for companies who battle paying employees without bank accounts.
With dopay, companies receive a corporate payroll solution to easily pay employees and track expenditures. Employees receive a payroll account and card, so the company doesn’t need to pay them in cash handouts. And the whole solution is mobile-optimized, so employees can manage their finances on a phone.
The retail banking industry is in no imminent danger of falling to fintech startups. But the threat of fintech is growing. Retail banks need to start innovating faster.
They can begin by adopting cutting edge tech that gets results. One such technology is a self-service debt collection software system. Read more about why your retail bank needs a self-service solution in our free guide.
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