Startups are disrupting existing business models. Whether it is Airbnb turning the hotel world upside down, Uber shaking up the taxi market or YouTube disrupting traditional publishers. In the financial world, however, something remarkable is happening: it appears that financial technology companies (fintechs) are actually making the sector more future-proof. In this article, you can read how this works.
The potential of fintechs
Expectations were that fintechs would disrupt the financial sector. These fintech companies would, for example, make banks superfluous, partly helped by new legislation such as PSD2. However, the expected Facebook bank did not materialise and people still ‘just’ bank with a bank. In contrast to their trust in tech companies, consumers’ trust in traditional financial companies appears to be undiminished.
This does not mean that fintechs have no potential. In fact, according to recent figures from the Dutch Startup Association and Techleap, of all the Dutch startups, fintech startups attract the majority of investments. One of the reasons why fintech success can coexist with a major role for traditional financial companies is that fintech startups focus on collaboration with parties in the financial sector.
Need for innovation
Financial firms are looking for ways in which they can achieve the same output with fewer resources. Digitisation helps them do this. However, innovation often proves to be a challenge as financial firms are faced with legacy IT. Note: digitisation does not mean creating a new, appealing website. Neither is digitisation complete when a new application is launched to attract Millennials and Generation Z.
Digitisation is a choice for a different way of working. By standardising and automating processes, costs can be saved and processes (and therefore companies) become more scalable. This makes a company more future-proof because it becomes more profitable.
Inventing the wheel yourself
One of the most common mistakes made by companies with a focus on innovation is that they try to reinvent the wheel themselves. For example, they invent a new app, which they have developed by a digital agency. Months and thousands of euros later, it turns out that nobody was waiting for the application and they could have made use of existing solutions in the market.
Fortunately, there are fintech companies whose aim is not to disrupt existing business models but to make them more future-proof. Blanco is one of these fintech companies. Thanks to Blanco, it will be possible to simplify KYC, compliance, portfolio management and administration, thus saving costs.
It is not just financial companies that benefit from collaborating with fintechs; consumers and/or end-users in particular benefit. Thanks to these collaborations, they stay in touch with their trusted partner and can make use of scalable and smart tech solutions at the same time. The best of both worlds.