By Aleksandra Wodzisławska, CEO Aforti Exchange
Throughout the years, fintechs have been intentionally accustoming us to independence since in this way, companies can reduce the cost of customer services. With that cost-cutting opportunity in mind, more and more companies that are providing loan services, currency exchange, servicing payments or even standard banking services, are gladly accustoming themselves to this new digital climate. Nevertheless, still many companies, especially those specialized in finance, insurance or debt collection are having difficulties adapting to new conditions and digital trends.
Traditional industries that are having or have had a difficult to adapt to new digital trends, soon will have to face a big threat, that is Payment Service Directive 2 (PSD2). Once the PSD2 enters into force, the fintechs will significantly grow into force. PSD2 will bring the largest revolution so far seen in the financial services industry – it will dethrone the banks by abolishing their monopoly and will set the new rules of the game. From the moment of its implementation, clients will be able to acquire and use more and more innovative services from non-banking financial institutions and fintechs while being subject to the same rules of safety and security, which of course remain the priority. Surely there will be new players emerging on the financial services market, able to provide services that were so far only reserved for banks.
While the traditional financial services industries will be busy competing with fintechs, and vice versa, the real winner out of this situation will be the clients. While initially indeed fintechs were basing their services on clients’ independence, nowadays we see that even the companies that are active in the digital sphere, are starting to realize that clients actually miss the opportunity to discuss or meet with a financial advisor as it is still possible when using services of traditional financial providers. Of course, we cannot yet talk about a serious metamorphosis of the fintech industry, but we see that more and more providers of financial services online are coming back to having direct contact with the client as an additional way of building and keeping the relationships. This is the model that we, as Aforti Exchange, have undertaken and we believe that this is our competitive advantage – being online-based and guaranteeing independence while, at the same time, offering our clients personal support, be it over the phone or even in person.
Thus, even though we are already in the era of fintechs and their role as well as market share will keep increasing, we are confident that there is a number of rules that need to be respected and remembered by both companies active in the fintech field or those that are currently adopting to the newest, digital trends:
- The client still feels the need to be noticed and supported;
- Financial products must be simple – no one likes to feel ignorant, especially when it comes to the world of finance where the client might feel lost and the role of fintechs is to make them comfortable;
- Timely execution is the king and will always be the key competitive advantage, which in the world of ‘ASAP’ might even overweight the cost criteria;
- Pricing must be competitive compared to this offered by banks and other standard financial institutions.
As fintechs are currently one of the fastest growing technology industries in the world, it goes without a doubt that the financial services markets will undergo a major transformation in the coming years. As the regulatory environment is and will continue adapting to this new realty, so will the traditional financial services providers in order to keep up with the competition and maintain their position in the market. This will lead to a situation where the clients will finally have a wide array of different financial products right at their fingertips and will have a much larger pool of opportunities to choose from since PSD2 is a significant step towards a digital single market.