Fintech services have attracted users fairly easily because they simplify basic financial processes. For instance, more people are now using digital wallets to make payments. This is much easier to remember than bringing cash or your credit card every time you leave home. If you always have your phone on hand, being able to make payments with it is extremely convenient.
Of course, that means that retailers have had to adapt. They need to upgrade their own equipment to ensure that they can accept such payments in the first place. This is simply one example of fintech changing the way that people in a specific industry do business.
It’s also not the only example. The fintech revolution has disrupted many sectors. The following points illustrate just a few of the ways that businesses across a range of industries will have to adapt in order to keep up with the fintech revolution.
Offering the Right Insurance Rates
Insurtech is a sub-category of fintech that, as its name implies, involves the use of technology to improve insurance services.
For instance, thanks to the Internet of Things, it’s now possible to equip cars and homes with devices that track user behavior. These devices can relay important information to a user’s insurance provider. A device in the car can tell a provider that customers tend to obey the speed limit, while a device in the home can tell insurers that customers lock their doors and take steps to boost their homes’ safety. Providers can theoretically offer such customers lower rates when they have this information.
These are benefits people will want. Insurance providers who don’t offer them may struggle to attract and retain customers in the future. That’s why it’s important for insurance industry professionals to start experimenting with this type of technology sooner rather than later.
Adjusting Business Models
Artificial intelligence isn’t just a sci-fi trope these days. This very real technology has many applications across a wide range of industries.
In the financial sector, one example of an AI application is data analysis in financial advising. Quite simply, the job of a financial advisor often involves analyzing data to draw conclusions about potential investments. AI could potentially outperform humans in this particular task. With AI, it’s possible to analyze data efficiently, constantly, and without any bias.
This isn’t to say that robots will replace human financial advisors anytime soon. However, it does indicate that professionals in this field may need to adjust how they do business. As a result, they may actually serve their customers better than ever before.
When a financial advisor doesn’t need to spend the majority of their time analyzing data, they can spend more time getting to know their customers. This is key to helping them to achieve their financial goals. Everyone has different plans for their money, and the more that an advisor understands those plans, the more qualified they will be to provide customers with personalized service. The AI simply crunches the numbers. The human advisor will use the insights the AI yields to assist customers based on their individual plans.
Bringing the Bank Home
It’s impossible to discuss the fintech revolution without also addressing the impact that it has on traditional financial institutions. As this blog has pointed out before, banks may need to work with fintech startups in order to stay relevant.
This is going to become increasingly important as innovations such as virtual reality (VR) begin to play a more significant role in fintech. Mobile banking services have already changed the way that customers perform basic financial tasks. Instead of traveling to a bank branch, they can now perform key tasks from the comfort of their own home via a smartphone.
VR could make mobile banking even more convenient than it already is by allowing users to “visit” a bank branch from any location in the world. After all, although mobile banking apps are helpful, they can’t fulfill all customer needs. There are still instances when it’s necessary to visit a bank and speak directly with an expert about opening an account, changing accounts, etc. Through VR, users can perform these tasks in a virtual environment.
This may sound like a far-off development, but it’s actually closer than you might think. Banks will need to change their approach to offering key services as a result.
Again, these are just a few examples of the ways that professionals across various industries will have to adapt in order to cater to people who use fintech products. Luckily, these changes are for the benefit of customers. The fintech revolution has simply made them happen sooner than some may have expected.