It appears that the biggest players in the UK banking industry have observed the growth of fintech startups and therefore have branded them as a potential industry disruptor. According to the MoneyLive report recently released by Marketforce LIVE, most of the British banks actually see fintech startups as a “significant threat” to the way their businesses operate and this conclusion was reached after consulting with 600 key industry players.
The report was obtained in an investigation conducted to know what traditional financial institutions think about the growing influence of fintech companies with regards to their future business endeavors as well as their current customer base.
Improved Customer Experience; The Driving Force
From the obtained finding, 81 percent of the total answers received emphasized that the greater strategy to acquire and retain customers is to provide a better customer service and experience for them and that big industry names are no longer sufficient to attract and keep customers. To add salt to injury, 79% of respondents also agree that fintech startups have “more engaging brands.”
Fifty-nine percent of the respondents accepted that they would not be surprised if fintech companies who are customer-focused, eventually replace them or give them a fierce competition when it comes to customer acquisition unless serious changes are made to their business model.
This is how the report put it:
“Almost six out of ten (59 per cent) of the bankers we surveyed perceive new intermediaries to be a significant threat to their relationship with their customers…From Amazon to Airbnb, Netflix to Uber, the story of digital disruption has not ended well for those incumbents unable to match the personalised experience and compelling cost savings of the newcomers.”
Banks Have Their Work Cut Out For Them
From the survey, it was learnt that 71 percent of respondents believe that banks can do better to address consumer needs in the aspect of convenience, speed and simplicity. From everything the report disclosed, it is glaring that there is no general agreement in the report which predicts what the future holds for banking services after the expected fintech disruption completely matures. Some respondents, about 31 percent of them, are of the opinion that challenger banks will be at an advantage following the disruption while 30 percent of the respondents believe that fintech will render banks obsolete.
A stunning 93 percent of respondents concur that without fundamental changes done to their revenue models and business, they may not survive past the next five years.