How fintech is changing the banking industry, and ...
Fintech is disrupting the banking industry throughout all its offerings. But, instead of competing against this emerging sector, financial institutions throughout the world are working with it, not least because of the numerous advantages incorporating digital technology provides them and their customers.
A 2016 report entitled Fintech and Sustainable Development – Assessing the Implications confirmed what most finance experts and industry insiders already new: that the financial system’s core functions are being disrupted by fintech, computer programs and other technology, usually digital, created to facilitate financial services. The result is a number of benefits, including greater financial inclusion; the mobilisation of domestic savings at a scale that enables investment in the long-term sustainability of the real economy; greater provision of financial protection; access to information for better economic decision-making and risk management; and the encouragement of long-term real economy investments aligned with sustainable development.
Funeka Montjane, Standard Bank Chief Executive of Personal and Business Banking South Africa, asserts that the future of banking lies in creating time for customers through fintech, saying that embracing digital technology has enabled numerous bank roles to become automated, a cost- and time-effective move that has benefitted both the Bank its customers. As banks’ relationships with fintech companies develop, she predicts that further technological innovations will open new markets and employment opportunities for economic inclusion.
However, as banks adopt fintech for the advantages it offers them and consumers, the report cautions that stronger action is needed to steer its direction towards sustainable development. Advances in blockchain, AI and the Internet of Things will enable this through innovations that build trust, transparency and traceability for financial transactions, but the following steps must be taken:
Ensuring fintech is an integral part of financial system development plans
Establishing a platform of leading fintech companies to influence enabling businesses and policies
Incentivising fintech alignment with sustainable development.
As we are dedicated to facilitating development in Africa that is driven by fair and environmentally protective practices, we have fully embraced fintech. Our Chief Executive for Personal & Business Banking at Standard Bank, Peter Schlebusch,, explains that constant change has forced the industry to realign, alter and diversify, not only the products and services on offer, but how it operates.
Consequently, we are now behaving more like a fintech company: it has upgraded its entire core banking system and gets exciting innovations to market quickly. All this to adapt and respond to changing customer needs.
“This season of technology has the potential to unleash human creativity to solve our customers’ problems,” says Ms Montjane, “and to build net positive systems and access to funding and markets for entrepreneurs, ultimately because we have both sides of the equation and the supply chain.”