Latest News  

TELUS International Europe: How big banks and fintechs are working together to innovate the customer experience

Comparing financial technology (fintech) companies to legacy financial institutions can invoke an image of David and Goliath. Fintech firms may be small, particularly when compared to the established titans of banking and financial industries, but they're certainly fierce

2017-09-18 23:08:06





Grégoire Vigroux
Vice-President Marketing of TELUS International Europe


With the use of emerging, often mobile, technology and smart design to provide customized experiences and slick user interfaces, the adoption of fintech has been impressively swift. EY estimates that 15.5 percent of digitally active consumers have used at least two fintech products within the last six months – with rates anticipated to double in the next year.

The meteoric rise of fintech companies has not gone unnoticed by their big bank counterparts. Jamie Dimon, JPMorgan Chase CEO, wrote in his annual letter to shareholders: "It is unquestionable that fintech will force financial institutions to move more quickly, and banks, regulators and government policy will need to keep pace."

But rather than duking it out to the bitter end, fintechs and legacy financial institutions are discovering that they are better friends than foes, combining their strengths to offer an exceptional and innovative customer experience in the process.

Working together to fill in the gaps


Traditional financial intuitions have had decades, if not centuries, to establish their brands and build rapport with consumers. But their reliance on old systems and procedures have stifled their appeal to a tech-savvy customer base. Yet, there's no way to avoid it.

From simple banking, to mortgages, loans, investments and debt consolidation, the modern banking experience is becoming more digitized, and fintechs have played a significant role in that evolution. Not tied down by traditional thinking or extensive regulation, fintechs are providing new and fresh perspectives to addressing customer needs and opportunities.

Intuitive user interfaces, personalized solutions and real-time recommendations based on interactive data are just a few of the unique characteristics fintechs are utilizing to redefine the customer experience. However, what they offer in innovation, they often lack in experience, capital and consumer trust, particularly as it relates to security. Blumberg Capital's 2016 fintech survey found 72 percent of Americans listed security as something to be concerned about with new online banking services, and that they are not confident that their information is private.

By partnering, more traditional institutions and fintechs are able to bring unique value to the table and ultimately offer customers an innovative, full-service banking, investing or payment experience.

Three partnership models


JPMorgan Chase has now partnered with more than 100 fintech companies, and it's not alone. All major banks, including Bank of America, Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo, have invested in fintech start-ups. These partnerships are a delicate balance of give-and-take with three key models emerging:

1. Outsource


Banks are no stranger to the outsourcing model, having long utilized external partners to perform various customer care, IT and back office functions. Outsourcing has helped financial organizations improve efficiency, lower costs and even generate top-line growth.

With a proven track record, an outsourced model can enable traditional firms to meet more demanding customer expectations. For instance, JPMorgan Chase is using fintech firm On Deck Capital to help offer quicker approvals and same-or-next-day funding to some of its four million small-business customers. Many banks have also employed IT Outsourcing in a similar fashion, to gain creative technology solutions that may be too expensive or specialized to develop in-house.

2. Invest


Many large financial institutions are eager to invest in fintech start-ups in an effort to manage disruption. Goldman Sachs, Citi Ventures, JPMorgan Chase and Morgan Stanley have put money into Square, a mobile payments company, to ensure access to its innovative technology. Meanwhile, JPMorgan Chase and Goldman Sachs have bet on online brokerage Motif Investing, and Morgan Stanley, Bank of America and Citibank have all invested in Visible Alpha, a start-up offering a platform to interpret and forecast stock data.

The benefits to both parties for this option are extensive. It's a relatively easy, low-risk way for banks to access innovative products and services that can strengthen their customer relationships and get a leg-up on the competition. For their part, the start-up secures a huge distribution network and regulatory compliance.

3. Nurture


To nurture new ideas in the marketplace, many banks are plugging into the start-up community without buying any direct equity. They start their own incubators, accelerators or innovation labs to get early access to new technologies and ideas from thought leaders in the industry. Wells Fargo, for instance, has pumped funds into boot camps to support a start-up developing automated real estate transaction technology, and another early-stage company exploring voice technologies.

Some banks also sponsor hackathons to discover new ideas, technologies and the best potential partners for mutually beneficial collaboration. Hackathons and other rewards-based competitions can get a bank's brand some recognition in the start-up community, while exposing the bank's staff to new ideas and technologies. The downside, however, is that there is often no exclusivity in most of these partnerships.

The road ahead


With pros and cons to each, most banks and fintech companies are experimenting with multiple partnership models to cover their innovation bases. While each partner reaps some benefit in the symbiotic relationship, the real winners are consumers. The evolving partnerships between fintechs and big banks ensure inventive banking solutions, built on a foundation of trust, and focused on the changing needs of today's savvy customer.

Keep up-to-date with the latest thinking about BPO, ITO and Contact Center solutions. Each month, TELUS International, a global provider of contact center outsourcing and BPO solutions, shares insights on the latest customer service trends.

Related articles: www.telusinternational-europe.com /
www.telusinternational.com


0 COMMENTS ^ Go back to Top
WRITE A COMMENT ^ Go back to Top
 
Your email address will not be published.
Nickname
Email
Comment
Validation Code
   
 
 
NEWS
Atos ranked in Top Five for Managed Security Services, Worldwide by Gartner

Atos, a global leader in digital transformation today announces that it has been ranked amongst the top 5 global players in Managed Security Services (MSS) in terms of 2017 market share revenue, according to th

 Read Full article »
Endava has been selected as an official AWS Well-Architected partner

Further strengthening its partnership with Amazon Web Services, Endava reinforces its Cloud services expertise and capabilities becoming an AWS Well-Architected Partner, the company announced.

 Read Full article »
Smartree Romania has a new operational director

Smartree Romania, providing HR services on the Romanian market names Anamaria Borza as the new operational director of the company, effective July, 1 this year. The new manager of Smartree team occupied the pos

 Read Full article »
ABSL Romania: Sibiu, a continuously evolving market, with great potential

Sibiu is a market with huge potential and constantly expanding, is one of the conclusions from "Outsourcing in 2018. Best Practices in Technology Adoption" conference, which was dedicated to the local business

 Read Full article »
Accenture assigns 200 mln. US dollars to digital age-focused education, training and skills initiatives in the next 3 years

Supporting its vision to improve the way the world works and lives, Accenture (NYSE: ACN) is committing more than 200 million US dollars over the next three years to help equip people around the world with job

 Read Full article »
Oracle: Customer connection missing as manufacturers yet to produce rewards from industry 4.0

Research of global manufacturers developed by Oracle with research company Coleman Parkes shows initial Industry 4.0 focus has been on internal changes rather than removing supplier, distributor and customer si

 Read Full article »
Nine solutions for smart cities delivered at Code4Cluj hackathon of Endava

The Code4Cluj hackathon organized by Endava at Cluj-Napoca between 18-20th of May generated 9 innovative projects meant to solve the problems faced by the community and citizens of Cluj.

 Read Full article »
Zitec's digital marketing division registered an increase of over 40 per cent last year

Zitec, a major provider of business solutions, digital services and personalized technology products in Romania, announced it registered an increase of over 40 per cent in the digital marketing segment in 2017,

 Read Full article »
Fab Lab Iasi issues the Report on Coworking in Central and Eastern Europe

This report was conducted by the PIN Maps teams (Iasi's modern office map, an impact initiative for the IT & Outsourcing industry) and Fab Lab Iasi (a 700 sqm coworking space, opened in 2017).

 Read Full article »
CBRE: the first two buildings in Timpuri Noi Square are leased over 90 per cent

CBRE announced three new tenants in TN Offices 1 and TN Offices 2 of Timpuri Noi Square, reaching over 90 percent take-up of the first two buildings in this office project.

 Read Full article »
 
 
MOST READ ARTICLES
» Committed to growth
» The Outsourcing industry announces its...
» ROMANIAN OUTSOURCING AWARDS FOR EXCELL...
» Zitec's digital marketing division reg...
» PwC: The competitive advantages of Rom...
» Luxoft expands Asia Pacific presence w...
» EXCLUSIVE: ABSL Timisoara - BPO and SS...
» How giving back pays dividends for com...
» Olga Botusan, Stefanini: There is a hu...
» How does leadership look today?
 
EDITOR CHOICE
Andrei Romanescu CEO, VEEAM, on the importance of people skills and leadership forming

Within the recently ended OT Learning & Development roundtable edition, Andrei Romanescu CEO, VEEAM stated that he trends of the current and following years underline the importance of people skills and leaders

 Read Full article »
OT Learning & Development: About capitalizing on self-willingness to reach performance

How to succeed in reaching the young and the valuable employees and wining their hearts and minds, so they will forever be committed to gain knowledge, evolve in profession and build a strong career inside the

 Read Full article »
OT Learning & Development now, about digital transformation, facilitating a culture of change and innovation

Some trends are here to stay, while some other may not. How about gamification, chatbots, microlearning, data analytics, mobile learning, augmented reality and others? Today's edition of OT Learning & Developme

 Read Full article »
The need of the industry to stay effective and relevant

In the current context of machinery and AI helping on operational processes of a company, with extended applicability in terms of capabilities, the digital context in which professionals, organizations and busi

 Read Full article »
We meet again at OT Learning & Development on June 7th

The Second Edition of OT Learning & Development roundtable will be held on June 7, 2018 at InterContinental Hotel Bucharest. The event brings together the business services professionals to discuss and discover

 Read Full article »
Latest News  
 
about us | newsletter | contact | members area | GDPR policy
Copyright © 2015 by Diplomat Media Events Design by Diplomat Media Events