The advent of various financial technologies has been excitedly welcomed by consumers as they create more options for transacting. However for the banking industry it presents a catch-22 situation. The recurring questions in most boardrooms ask if fintech is a threat or are there opportunities we can leverage on as we continue to stimulate financial inclusion.
Well, how banks treat fintech largely depends on how they approach them. In any situation there is always room for opportunity.
In an opinion piece to Eswatini Economic Policy Analysis and Research Centre (ESEPARC), Muzi Dlamini suggests that the age of traditional financial service providers depending on cash-in and cash-out services via banks and ATMs is on a downward trend as financial technologies take over. This paints a gloomy picture if one is to only end with that paragraph when analyzing the issue. Thankfully he further provides a glimmer of hope saying, “the banking industry has begun to monopolise these technologies to improve its bottom line. Banks are using fintech to make existing financial products mobile and more accessible. They are simply transforming the physical structure of a bank into a mobile and flexible concept accessible through cell phones. As a result, these innovations are not really expanding the types of financial products available to the different sectors of the economy.”
This is true. I agree fully with him. We have seen many banks now offer banking at fingertips and providing a lot of convienience to customers. This is one way that banks have decided not to look at the surge as a threat but an opportunity to evolve. Take the case of FNB Eswatini for example. Since they came to the country they have been churning out a lot of fantastic products that have leveraged on fintech. These include the likes of e-wallet and FNB Mobile App. They have refused to be stagnant while the world evolves.
Last year I attended the Eswatini Economic Conference where this question was posed more than once in various settings. In one of the seminars Google Software Engineer Sakhile Dlamini spoke on the title of “Technology and its impact on future banking experience.”
He said innovation when harnessed correctly had the power to improve the lives of everyone including in the banking sector. So in Dlamini’s view fintech is not a threat but a window of opportunity for the banking sector. It is only a matter of perspective and objective application and not resistance to the exciting evolution that comes with technology every now and then.
I am in concert with him with regard to this view. Fintech can catapult better customer experiences rather than water them down. The world is now quickly becoming techno-savvy.
The Coronavirus pandemic, which saw many people having to work from home and rarely have the luxury of visiting physical banks also saw the financial institutions step up their efforts of leveraging on how to also adopt fintech to their product roll outs. The results were superb. Now more people are online and transacting via their phones and laptops than at any point in time. This proves that fintechs can provide opportunities for banks.
While there have been the threats of new digital currencies threatening the banking industry through fintech, banks have remained resolute offering more secure, reliable and tried and tested methods of banking.
What appears to be a threat to the banking industry is now being turned into an opportunity. That is how every technological advancement should be embraced. We always have to find ways we can benefit from them and enhance the customer experiences.