How Do Global Banks Use Fintech to Enhance Customer Experience Models?
Banking and associated financial services will always continue to be an essential service for everyone, given the fact that everyone uses money on a regular basis and are often required to engage in different kinds of financial transactions for varied purposes! Even with the introduction and innovations in digital banking services and neobanking, the core concept will always remain an essential service.
Because of this, there is a constant need to bring about improvements in the way banks function and in the way they offer services to their customers, such that everything becomes much simpler and takes less time.
Keeping the above-mentioned in mind, technology has been developed particularly to help bring about positive changes in financial procedures. Fintech or financial technology aims to improve and automate the use as well as the delivery of financial services. It was initially developed to help businesses or companies and consumers record and manage their financial data, operations, and processes, with the use of specialized algorithms as well as software that can not only be used on computers but also on smartphones, which makes this technology quite accessible.
In recent times, fintech has become more and more consumer-friendly and provides more consumer-driven services and also covers more sectors such as education, health, retail banking, investment management, fundraising, development of cryptocurrency, etc.
How Does Fintech Help the Banking Sector?
Just like any other sector, banking too has been positively impacted by the use of modern and improved technology, i.e., fintech or financial technology, and here are some ways in which that has happened:
- Virtual Functioning: With the help of fintech, many banks have been able to better manage their operations and have also been able to eliminate face-to-face engagement with their customers. Fintech tools provide them with the freedom to perform all their functions virtually; this means that they have been able to work purely on technological infrastructure.
- Increased Customer Engagement: Owing to the ease with which customers can now manage their banking functions and have a smooth banking experience due to fintech, many banks have seen an increase in customer engagement. Moreover, they have also been able to effectively meet the demands and needs of the customers while improving their customer service.
- Better Customer Service: Since customers or clients have a wide variety of demands from their banks and the services they offer, with the help of fintech, banks have been able to properly store all data as well as analyze it so as to bring about improvements in customer service, which in turn also brings in more customers or users.
How Global Banks Use Fintech to Improve Customer Service
Keeping in mind the fact that it is exceedingly important to provide customers with improved banking experiences and better customer service, many fintech firms have come up over the years, and banks have taken to using fintech with the aim of bringing about a change in the above-mentioned factors. Some of the global banks using financial technology, or some of the fintech firms providing better customer service, digital payment, digital banking facilities, etc. include the following: –
- Qudian: Qudian is a China-based fintech firm that was established in the year 2014 that deals primarily with lending. What separates most western countries from China is that in western countries, most people make use of credit cards to complete payments for their purchases, which allows them to repay the amount at a later date. But customers in China do not follow this trend, and this led to the establishment of Qudian. It operates mainly as a student micro-loan site, as an installment payment and an investment management platform, and has managed to form partnerships with different e-commerce, digital and financial services in order to attract more and more customers. The firm is believed to go public in the near future and could raise anywhere between $800 million to $1 billion.
- Ant Financial: Another China-based fintech firm, Ant Financial, is actually a subsidiary of the Alibaba Group and has originated from Alipay (the world’s leading third-party payment platform) in the year 2014. Since its inception, the firm runs Ant Financial Cloud along with other financial services and covers various financial aspects such as wealth management, credit reporting, private bank, payments as well as cloud computing.
- Adyen: It is a Netherlands-based firm that was founded in the year 2006 and now deals primarily with providing businesses with a single platform to accept payments through any sales channels just about anywhere in the world. The company presently serves over 4,500 businesses and helps process payments through mobile wallets, internet banking, or even in-store. It continues to grow at quite a fast rate and has a lot of well-known clients, out of which Facebook, Uber, Burberry, Netflix, Spotify happen to be some.
- Oscar: Oscar was founded in 2013 in the United States of America and works towards improving the healthcare system and customer experience through the means of insurance and technology brought together. The firm has tried to make the healthcare system much simpler, efficient, and cost-effective for the customers by providing them with a transparent and faster medical claim process at low costs. Companies or ventures such as Fidelity, Google Capital, and Khosla Ventures are some of Oscar’s investors, and have lauded the firm for making health insurance “simple, intuitive and human.”
- SoFi: SoFi is a “new kind of finance company,” which was established in the year 2011 and is based in San Francisco, United States of America. It was actually created by four students who met at the Stanford Graduate School of Business. SoFi deals with offering students loan refinancing, mortgage loans, wealth management, life insurance as well as personal loans and has managed to become a multi-billion-dollar company over the years with $19 billion of loans funded.
Fintech and financial institutions go hand in hand in today’s date, since the number of people using financial services in their day-to-day lives has only increased over the years. They need to not only understand the various banking processes that are linked to their needs but also need an effective banking system, one that is simple, useful, and understands their needs best.
Fintech helps banks and such institutions gather, record, and analyze all the data pertaining to customers so that they can develop a better system and can provide them with improved banking services as well as customer service.