Customer-Focused Initiatives Help Partnerships Between FinTechs and Banks Thrive

Technology has disrupted the financial industry, and banks are no longer in a position to resist these changes. As new Financial Technology (FinTech) services revolutionize our methods for banking, investing, paying bills, and doing business, banks will have to innovate their services to keep customers from defecting. FinTechs aren’t safe in this evolving market either and lack the strong infrastructures and large customer bases that banks often take for granted. Instead of fueling the competition, these institutions are partnering up to offer customer-focused initiatives that profit all parties involved.

According to a three-year study that included a survey of 10,000 millennials, one in three people in this age group is open to switching banks in the next 90 days, 53 percent don’t think their bank offers any unique services, and one-third think that banks will become irrelevant in the future. After losing customer trust following the financial crisis of 2008, banks need the accessible services that FinTechs are offering in order to remain both relevant and competitive.

In a Business Insider report, more than half of the respondents (54 percent) said that bank and FinTech partnerships increased revenue. 87 percent said these collaborations allowed them to cut costs, and 83 percent said that their brands benefited.

One example of a successful partnership is the Financial Solutions Lab (Opens Overlay), co-managed by the Center for Financial Services Innovation (Opens Overlay) and JPMorgan Chase. The $5 million, five-year project tests, identifies, and scales innovations that support savings, improve credit, and build assets. This allows finance giant JPMorgan Chase to influence FinTech and take risks outside of their usual scope.

Another unique partnership is Chase Business Banking and OnDeck (Opens Overlay), an online small business lender. The two companies partnered to build a new Chase lending product that will provide small-dollar loans to Chase customers. By combining Chase’s relationships and lending experience with OnDeck’s technology, they’re able to offer an inventive product with an easy application process that provides almost instant approvals and same-day or next-day funding.

The financial sector is changing rapidly and banks are struggling to adapt. By partnering with FinTechs, they help secure their future and demonstrate to other industries how technology and tradition can work together.

Financial Technology Is Overhauling Banking Faster Than We Can Say “Checkbook”

Life Before the Financial Technology Boom

With advancements in financial technology (fintech), there’s no denying that banking has become infinitely more convenient over the years. We have the ability to autopay our bills, receive account balance updates to our phones, and no longer are our purses and wallets cluttered with forgotten bank receipts, as they’re now sent directly to our inboxes. It’s hard to believe that not so long ago balancing checkbooks and visiting a physical bank branch for most of our account needs were the norm.

We used to have a plethora of options when it came to checkbook designs, from Disney characters to florals to the artistically abstract, and now we’re hard-pressed to find a reason to use our checkbooks at all. When taking note of the dramatic improvements to the financial technology industry over the last decade, it can feel a bit like living in a spinoff of Back to the Future.

How Financial Technology Is Revolutionizing Banking

Who would have imagined that we could create another stream of income by using an app and building the global financial community? With SocialBoost™, Meed’s Member Banks return a portion of their revenue to the global community that we, as Meed users, can receive as a regular stream of income. And our earning percentage can increase for every person we invite who becomes a Meed user. Thus, the larger we grow the global community, the more we can earn.

Another advancement is the ability to send international remittances to family members in developing countries, which used to be a long, complicated, and drawn-out process. Scams were common, and it could take weeks for money to arrive. Remittances account for one of the largest sources of external finance for developing countries, and it is essential that funds be sent in a timely manner without the sender acquiring unnecessary fees. Thankfully, new trailblazing mobile financial services apps like Meed allow for remittances to be sent directly across borders to the recipient’s mobile device, making it easier for rural populations to access.

The financial industry has kept pace with the technological boom, and simplified our lives in numerous ways. Sometimes it’s difficult to keep up, and it makes one wonder what will be outdated or forgotten when we look back on our progress in the decades to come.