Significant Challenges Preventing Banks and Fintech to Work Together
Fintech is transforming the way banks wont to work. Payments and financial services are evolving with technological advancement. UPI is now one among the foremost preferred payment methods for both P2P and P2M transactions. Online commerce has become more convenient due to payment solution companies and their products. While all of those have benefitted customers to an excellent extend, banks are still struggling to deal with the towering change that fintech has born to.
Let us check out some prominent challenges for banks and fintech to figure together:
Impacting Consumers with a scarcity of Exposure to Technology
These technical shifts may go wonders for tech-savvy consumers. But, there’s an outsized portion of the population without much exposure to technology. it’s utterly important to deal with those consumers who aren’t well-acquainted with technology. Several modes of everyday bank transactions could seem complicated to those consumers. Also, it’s not compulsory for banks consumers to open accounts as long as they need financial and technological knowledge. Therefore, fintech and banks may find this as a big challenge to figure together.
Trust Issues
Trust are some things that takes tons of your time to create . Banks have won the trust of their consumers over the various years they need operated. When it involves finances, people are reluctant to undertake something new immediately after it gets introduced by the banks. it’s often a standard case that an answer provided by fintech isn’t instantly accepted by many. as an example , customers still prefer the old-school method of banking over UPI when doing larger value transactions.
Source — Financial Tech Review
Banks May Face Increased Tech Dependency
Over the years, many manual works have shifted to automated processes. But manual processes still thrive at the core. Some processes, along side legacy systems and their regulatory framework, make it difficult for banks to adopt new technologies. it’s going to require plenty of effort to implement changes. Fintech bodies are fully customer-driven. Their motto is to form it as easy as possible for a customer to perform all their financial activities. Therefore the partnership between customers and fintech can cause an entire transformation of how traditional banks work while increasing tech dependency for the banks.
