Business people discussing Fintech in a lobby.
Larry Lubin Oct 08 ,2016

Naturally, the fear of FinTech looms large in the ranks of traditional financial institutions. The newly emerging FinTech sector is the saucy, young upstart in the financial world, turning the way traditional finance has done business for decades on its head.

At first, institutions took an adversarial stance towards FinTech startups, decrying them for simplifying financial processes that shouldn’t be simplified, and automating financial decisions best served by a human touch. Particularly disliked was onset of so-called robo-advisor technology that took the human factor out of selecting investments.

The fear of FinTech is very rational for large financial institutions. However, before declaring FinTech the foe, consider this.

Are consumers your enemy? Not likely if you want to stay in business.

Trust and loyalty for financial institutions is at a record low. The expectations of financial consumers have changed drastically. One strategy to improve loyalty is to provide new products and services that better serve consumers’ financial needs, enhancing their brand experience, and making them think highly of you. FinTech innovation can be a brilliant surprise for your customers, and serve them better at the same time.

FinTech plays into the financial sector in two primary ways:

  • On the frontlines, targeting consumers directly and disrupting traditional financial services e.g. FinTechs that provide online lending, automated investing or financial management
  • Behind the scenes, strengthening the enterprise market in banks, hedge funds, and other financial services to provide better and more consistent services to customers e.g. Platforms such as holistic product selectors that make it easy for advisors to find the most ideal product for their clients

Nothing breeds customer loyalty better than pure amazement. A FinTech experience your customers love can make that happen. For example, New York-based Moven, often referred to as a neobank, allows users to spend and manage their money from their mobile device, while providing real-time feedback on their budget and spending.

Another example is HelloLife, a holistic retirement income program from Great-West Life, London Life and Canada Life that enables advisors to collaborate with clients on a spending plan to last throughout their retirement.

FinTech doesn’t have to be large-scale to make a difference. Starting smaller with retirement planning tools, calculators, product selectors and apps can help your customers find what they want easily. That eureka moment scores loyalty for your brand.

FinTech goes hand-in-hand with disruption, which is a disturbing concept, no doubt. But from a consumer perspective, FinTech might be the best thing that’s ever happened in the financial world.

How does FinTech disrupt the financial industry?

  • Promises a better, simpler experience for consumers and investors
  • Addresses strong market demand for lower management fees
  • Serves an increasing segment of consumers who prefer self-service, already an expectation among millennials

These “disruptions” are all changes consumers want, and FinTech is delivering it to them, easier, cheaper and possibly better than traditional banks.

Think about why consumers have little loyalty for financial institutions, even though they’ve sometimes been with the same bank for decades. The institutional and sometimes impersonal attitude is one reason. The fees and the complications are a second. And, the frustration with slow and cumbersome processes add to the dissatisfying customer experience.

Enter into this market FinTech: simple, easy, self-serve and fast. Exactly what the consumer wants. Frightening, perhaps. But true.

Key Takeaway

FinTech startups are great for consumers. They create healthy options for consumer CHOICE in the financial market, and their innovation forces big banks and brokerages to transform the way they do business.

At the end of the day, financial institutions serve consumers. Consumers like FinTech. Ergo, FinTech is mostly likely a friend. But there’s more. The Fintech ‒ Friend or Foe debate continues in Part 2.

BlueRush has helped many companies leverage FinTech, producing apps, automated product selectors, financial calculators and more. Talk to us about what you want to do. We may have some ideas for you.

Download a PDF copy of Part One: Fintech- Friend or Foe? 

About the author: Larry Lubin

Larry Lubin

As original founder, Chairman and CEO of Fitech, now part of CGI, Larry began innovating in sales, software development, and financial services. Many leading applications for Financial Institutions including the Reality Check™ series for Scotia Bank were developed by Larry and his Fitech team.

His vision of an optimized and fully integrated sales and customer experience that leverages the power of technology is at the heart of every solution today.

In September of 2003, BlueRush was created with the mission to create the ultimate customer experience. BlueRush currently works with many of North America’s leading financial services, healthcare and consumer packaged goods companies.


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