More alternatives to banks will emerge

Banks have been the main financial services providers for centuries.

More alternatives to banks will emerge

Their dominance has persisted, despite a relatively relaxed attitude to innovation, and a persistent trend of just average customer service – an issue that affects many traditional industries.

Banks may dabble in the technology space, but make no mistake: they’re finance-first, and their supreme position in the industry allows them to treat technology with curiosity, rather than urgency. They don’t focus on making systems better, because as sprawling, international organisations, it’s more difficult.

But the market no longer moves at bank speed. Online purchasing needs and online technology have both evolved with the times: in 2018, payments must be fast, reactive, and completely transparent – and banks are, by nature, methodical, slow, and opaque. These traits make keeping up with customer requirements very difficult.

It’s probably no surprise that merchants are looking elsewhere. To stay competitive, they need payment providers with a technological edge, but they also need a level of service to go with it. They want customised reporting, multiple payment options, and collaborative relationships with their providers’ development teams. A bank can’t always provide this, but a fintech company often can.

Merchants are doing more research, and they’re discovering something: they have options, and the banks may no longer be their most natural partners. In 2018, this discovery will take on even more importance. Flexibility and bespoke service will stop being nice-to-have and start becoming an industry-standard.

The year ahead will see society continue its technologically-empowered march towards a world of seamless, cashless payment convenience. The burden of innovation has already shifted from financial institutions to other payment solution providers. The explosion of mobile, the acceptance of crypto, the eroding domination of the banks; these are important trends in themselves, but they are also an indication of things to come.

Finance is no longer just about finance: it’s about technology – and technology companies will always be better at technology than anyone else.