The current weakness in fintech company valuations may provide opportunities for traditional banks to acquire new customers or increase capabilities in areas such as lending, payments, and specialized software solutions. On the lending side, fintechs have developed strong capabilities in mortgage and unsecured consumer lending, along with small business lending. Neobanks have emerged to serve particular market niches, although valuing those opportunities could prove challenging. There’s also a significant risk of customer runoff, and issues associated with the relationship with the neobank’s current partner bank to address. Interesting opportunities also exist to acquire players providing software solutions to specific industries and could provide an entry point into embedded banking. Assuming an alignment exists regarding strategy and risk tolerance, acquiring a fintech in the current down market could allow traditional banks to capitalize on some of the innovation that has already occurred and position themselves to better compete going forward.
The effective use of data is critical to success in this fast-moving world. Financial institution data often resides in organizational silos with restricted access and a lack of ability to integrate with information from other parts of the company. ‘Data democratization’ refers to providing access to data across a wider array of internal users, regardless of their role or level within the company. This allows for better and faster decision-making. Creating an enterprise store of trusted financial data is one issue. Another challenge is providing data literacy training and support for employees so they can confidently use this information.
Robotic greeters in branches, the metaverse, and an increasing role for cryptocurrencies are among the innovations that may be reality in the near future. “As banks think about digital banking, the mobile app is where most banks are focused today. But the metaverse could provide richer, more productive customer conversations than the current model of people staring at each other on a flat screen.” Peer-to-peer electronic funds transfer using a blockchain rather than a financial intermediary is here today. Robotic greeters? Well, they’ve been used in China for several years. . .
ChatGPT is a powerful language model that can assist banks by increasing employees’ productivity, improving the customer experience, automating repetitive tasks, and providing personalized financial advice to customers. With the ability to understand and respond to natural language, ChatGPT is an easy way to leverage artificial intelligence to harness data or resources on the internet. Banks tend to store data in a flat, static manner that only a few can access. This application now allows “didactic AI,” where a banker can natively ask questions and get the information they need. ChatGPT does an amazing job at maintaining the state of a conversation so that you can drill down and interrogate information.
Note – the above article summary was written by ChatGPT.
Note – the above article summary was written by ChatGPT.
The nation’s largest banks plan to launch a digital wallet to compete with third-party wallet operators such as PayPal and Apple. The digital wallet will link to consumers’ debit and credit cards and will be managed by Zelle parent Early Warning Services. The yet-to-be-named wallet, which is expected to launch in the second half of the year, will operate separately from the EWS-run peer-to-peer payments platform Zelle.
Gen Z already has $360 billion in disposable income, and they will inherit $30 trillion in the next 30 years. With an attention span of 8 seconds, they consume content differently from previous generations. They demand simplicity in financial products and intuitive user experiences. They prefer shopping experiences that are more convenient and spontaneous, seamlessly interwoven with social media. Gen Z, along with nine out of 10 millennials, are also interested in sustainable investing. Understanding these differences will be essential to attract this younger generation of customers.
