Fintechs and the Digital Banking Experience Part 2

by Anne Guenther
October 02, 2018

In part 1 of this series, we explored how customers today are pushing the boundaries of digital innovation for the banking industry—and as part of the transformation, how fintechs (financial technology companies) play a catalyst role in the evolution of the banking ecosystem that’s helping to set more competitive benchmarking and sharpen the focus on the customer experience (CX).

While fintechs are certainly a catalyst for digital innovation and can provide banking services, there are several key factors that reinforce the incumbent banking organization’s position, including regulatory compliance, the inertia of customers to switch and the ability for banks to incorporate these new capabilities.

Digital banking: Checking online bank account on mobile device

Are fintechs a threat or an opportunity for banking organizations?

Customers today, including millennials, want both physical branches and a digital experience. The physical banking centers and their branches respectfully represent the core brand and values of trust and service. The digital experience is about innovating the CX and leveraging the power of data to avail customers greater convenience and personalization across channels. Both the physical presence and digital experience are required for banks to attract and retain new customers and deliver sustainable growth. However, for banks that fail to embrace this future-focus, the risk of falling behind can result in customer churn and loss in market share.

62% of banks expect to be digitally mature in 2020

Progressive banks and credit unions realize these new challenges connected to fintechs are more about an opportunity than a threat. In fact, regional and community banks as well as credit unions, have an advantage—they tend to be more nimble in adopting new processes and technology than larger financial institutions with proprietary platforms. Additionally, these organizations often have more flexibility to partner with technology providers to formulate solutions that are tailored to their unique business requirements and enable a differentiated CX.

The role of the network

As banking organizations seek to transform their CX and partner with fintechs to expand their digital innovation, having the right network infrastructure is mission‑critical. For example, improving cloud-based application performance is pivotal to enabling the digital CX with more value-added services and support for new revenue channels. Ensuring the availability of critical applications is essential to delivering a frictionless CX and ensuring banking employees can properly address customers’ needs.

When evaluating your network infrastructure to determine its bandwidth, security and scalability to support your banking organization’s digital transformation, it’s important to gain insight into how banking organizations are adopting emerging technologies. These areas are examined further in this white paper, which includes feedback from Tier 1, 2 and 3 institutions.

Additionally, for banking organizations seeking to modernize their network infrastructure—whether it’s a short-term update or long-term overhaul—leveraging professional services to help with the evaluation and navigation of options can be extremely beneficial. Taking this approach with a technology partner that specializes in network solutions and cloud-based applications can provide an audit of your existing network and security infrastructure. A number of banking organizations prefer this approach, as an assessment of their infrastructure identifies any network gaps or security vulnerabilities and provides options for network optimization, as well as migration and configuration services. When looking to transform your infrastructure for growth and elevate the customer experience, the modernization of your network is an essential step.