Fintechs have a put a dent into big banks, but they have a long way to go if they want to overtake them. They will need to follow these two tactics to get a fighting chance.
It’s no secret that fintech and big banks have been engaged in a war not just for customers but for the very future of banking itself. This war has not been constant, as big banks often try to integrate fintech features and fintechs have begun to even acquire banks.
However, fintechs still have a long way to go if they want to replace more traditional banks as the primary provider of financial services. They will need to follow these two tactics to start with.
Invest in persuasion
With many customers, the reason they don’t make the switch from their bank is the same reason they don’t drop their debit card for mobile payments, they simply don’t see a reason to.
If someone is happy with their bank provider, or they simply don’t understand the more complex features of a digital only bank, they will likely not see a reason to switch.
In order to counter this, fintechs need to invest in persuasive advertising that clearly showcases the advantages of their platform versus more traditional banks.
For example, I have seen several advertisements for platforms that offered innovative savings tools, such as automatically rounding up all purchases to the dollar and sending the excess change to a savings account, thus allowing customers to save money without even thinking about it. By clearly communicating to customers the time and money saving-techniques of their platform, fintechs can help convince customers to make the plunge.
Invest in infrastructure
Another reason why customers may be less likely to jump to digital banks is simply because they want a physical branch. They want to be able to go in and talk to someone face-to-face about their money, or they simply want a convenient ATM if they ever need to pull out cash.
In order to meet these customers’ needs, fintechs need to take a page out of the traditional banking book and invest in brick-and-mortar infrastructure.
They can do this in a variety of ways including:
- Purchasing and deploying ATMs.
- Purchasing existing smaller bank branches.
- Establishing mini branches in coffee shops or other areas.
- Partner with ATM networks to offer your platforms.
- Offer video call consultations online.
Of course, these are only a few ways fintechs can take charge of the banking world, and as startups and established companies alike continue to innovate, we will see different types of solutions to meet customer’s needs.