The Hare Is Back In The Financial Race
The Hare Is Back In The Financial Race
Once upon a time, a hare and the tortoise decided to race. The tortoise, against all odds, won the race. This happened because the hare decided to nap under a tree even before finishing the race. Had someone woken up the hare, the hare would have definitely crossed the finish line before the tortoise.
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Banks are the "hare" of the financial race. Banks were the first constituents of the financial industry and have been around since the time the concept of currency originated. The currency itself graduated from a wooden plank to coins and then subsequently in the form of paper bills. Now currency is taking on a digital form. However, the tools for tracking and managing financial flows are incredibly antiquated. Last year, CitiBank transferred $900M to a hedge fund due to “human error”.
Digital Transformation in the Payments Industry
A digital revolution is forcing financial institutions to evolve their payment solutions. The payments industry is one of the most complex industries in the financial world. Multiple players in this industry work in tandem to make payment transactions work. Digitization has not only made the payments process more transparent but also improved transaction speed and overall user experience.
The rise of the Tortoise
FinTechs are not only selling a seamless payment experience to end-users but also providing important services to financial institutions to enable smooth integration with multiple parties along the payment chain.
The Wake-up call for the Hare
Simply offering a bank or brokerage account is no longer good enough to stand out. New platform integration solutions make it extraordinarily simple to integrate the core features of banking into a unique app-based experience. Technology backed financial services are the new selling point in the payments industry.
Conclusion
Technological advances in the form of mobile devices, Artificial Intelligence, social media and blockchain have ushered in an era of open banking in the new millennium. Large monolithic firms, because of their large IT footprint, are collaborating with FinTechs for a faster go-to-market.
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