Financial Technology (Part 5)
FinTech has already unveiled many “disruptions”, and is probably keeping many more under its belt. “People need banking, but they don’t necessarily need banks.” said Heather Cox, Citi’s Chief Client Experience, Digital, and Marketing Officer. James Dimon raised the alarm, “There are hundreds of start-ups with a lot of brains and money working on various alternatives to traditional banking.”
If you can’t beat them, join them! The smartest move is to collaborate, not to compete –and many banks have understood this. They are creating incubators, setting up specialized venture funds, creating partnerships, or simply acquiring start-ups. Strategies differ but the goal remains the same: survive, and event profit from the digital disruption.
In 2015, FinTech became not just a buzzword, but arguably, “the” buzzword and this shows no signs of changing. Now, direct competitive pressure for banks is not only coming from other banks, but also from thousands of FinTech start-ups and powerful tech giants with enough capital to cherry pick the most interesting areas of banking to leverage their own business models and millions of customers. 2015 began with exciting news coming from the UK, where the government announced the initiation of a data sharing and open data initiative in banking (open Application Programming Interface initiative)
In the foreign exchange sector, services like WeSwap are entrants into the currency exchange market, but they are doing things quite differently from the traditional money exchanges – WeSwap actually allows people from different countries to interact and exchange local currency at a predetermined local rate, far cheaper than the commision traditional money exchange businesses place on exchanges.
Smart wearables are set to revolutionize the banking industry.The forecast for shipping wearables in 2015 is 45.7 m units and this is only going to increase. Apple watch already allows the wearer to check their banking balance, track their transaction history, and find nearby branch.