Tuesday , September 26 2017
Home / Banks / Are Banks Behind the 8-Ball with Fintech Companies?

Are Banks Behind the 8-Ball with Fintech Companies?

The trend in recent years has been for financial companies to stay away from FinTech. It is widely accepted that FinTech is the future of finance, and it’s developing at a rate of knots. Banks are behind the 8 ball when it comes to FinTech innovations in investment practices, personal loans, business loans, banking options and financing options.

Traditional banks may have eschewed FinTech companies, but now they are accepting these disruptive technologies as the new normal. Big banks like Wells Fargo & Company, Bank of America, Citibank, HSBC, Chase and others recognize that FinTech companies are onto something big when it comes to mobile payments processing, digital payments, cryptocurrency, and blockchain technology.

Establishing Lines of Credit with Lenders

Banks have started allocating a greater portion of their budget to adopting disruptive FinTech technology to boost their product offerings. Now, banks are working hand-in-hand with various startups to ensure that banks are on the cutting edge of this innovative technology. Customers benefit from this collaboration, in that they have access to a wider range of banking services – vis-à-vis mobile technology – at substantially lower cost.

FinTech has the unique ability to process financial transactions quickly, easily, and seamlessly. Banks are bogged down by bureaucratic gobbledygook which makes it a nightmare for customers to deal with them when trying to establish things like lines of credit, opening accounts, consolidating loans etc.

The Power of FinTech to Disrupt Traditional Banking

The efficiency in operations of FinTech companies is their saving grace. While banks are slow and cumbersome, FinTech companies are agile and efficient. Blockchain technology is now being adopted en masse by the world’s premier FinTech Enterprises, and many banks are looking to implement this technology to expedite transactions processing, lower costs, and meet the exigencies of customer demand in the modern age.

Artificial intelligence fraud detection services, smart loans, and peer-to-peer payments processing are now the norm. The use of mobile technology, notably apps and Internet-based services makes it so much easier for anyone to access FinTech than ever before. Clients can track their spending and income quickly and easily by using the latest technology and mobile apps on their iOS and Android-powered devices.

Chinese FinTech Companies Dominate the Scene

Various Chinese FinTech companies have taken the lead over traditional banks in terms of processing financial transactions. In July 2017, a major conference was held in Hong Kong, known as the Rise Conference. Various high-level dignitaries and executives were in attendance, including the VC of JPMorgan Chase for Asia-Pacific, Tencent’s Tenpay, Alipay and others. The FinTech juggernaut, Tencent ‘s Tenpay reportedly had the capacity to process some 800 million payments every hour during the Chinese New Year, with an estimated capacity of 46 billion payments over 5 days.

Consider that Alipay is capable of processing 50,000 payments every second, compared to 25,000 for Visa, and a similar amount for MasterCard. Online payments processing through FinTech (non-bank services) is leaps and bounds ahead. Tencent’s Tenpay is leading the charge as it controls WeChat Pay and Alipay. Between 2010 – 2016, third-party payments processing volumes in China grew by x74, to $11.4 trillion.

The majority of these transfers (56%) were P2P, and 16% of them were consumption-based. By December 2016, Tencent’s Tenpay had 600 million payment accounts, while Alipay reached 520 million accounts by March 2017. The industry standard – PayPal – is now the industry laggard with just 197 million registered users. Goldman Sachs estimates that there were some 3.4 billion third-party payments processing accounts in China in 2016. The rapid and unprecedented rise of online payments through FinTech overshadows similar growth with traditional banking. According to The People’s Bank of China, non-bank services increased by 60% in Q1 2017 to $3.9 trillion, up 43% year on year.

Check Also

Upgrade, Zopa, Starling Bank, Harvard and 10x Future Technologies confirmed as speakers at this year’s LendIt Europe

LendIt Europe, the largest European event series specialising in fintech and lending, has confirmed its …

http://www.health-canada-pharmacy.com | http://nygoodhealth.com | http://quotecorner.com/online-pharmacy.html