On June 3rd, Laura Manescu, FinTech specialist at Modex, was one of the speakers at Future Banking 2020 online conference, an event focused on the “new normal” in FinTech and banking. Laura spoke about the challenges that banks face, and what should these institutions do in order to better embrace a digital future.
A change in people’s behaviour towards financial institutions
Looking at the big picture, it’s obvious that the coronavirus pandemic has triggered a change in people’s behaviour towards the financial institutions. Nowadays, more than ever before, people avoid paying with cash, opting for card or online payments instead. They also avoid going into the banks’ branches as much as possible and they try to perform the needed transactions online. Statistics show there’s been a visible increase of payments through banks, especially online, but banks are not really prepared for this substantial volume increase.
People’s trust in technology has become obvious
With millions working from home – some companies have already said that this is how they would work also in the future, without requiring employees to return to their offices – the use of technology for online meetings has increased exponentially. There’s also been an increase in the importance of digital signatures compared to pre-pandemic times. Another aspect that the pandemic has highlighted: the human touch returning to the banking industry.
In these trying times, digitalization is important, but it should also be delivered with the human factor taken into account. Nowadays, banks are taking a step back in order to take a good look at their market, to have a better understanding of the big picture, and see which are the best use cases that new technologies should be applied to.
The user experience is key to customer success
Commenting on the above topics, Laura Manescu, FinTech specialist at Modex, said: “I think that banks will reinvent themselves and slowly change, and understand that key to customer success is the user experience – firstly, the cost of financial services – secondly and innovation – thirdly. The most obvious change that this pandemic brought was access to fully digital services and this is what people are looking for.
And whatever products Modex builds for the financial industry, it has in mind to be fully digital and, whenever possible, automated. The purpose is to focus on providing seamless software services. Cash is becoming more and more obsolete and it is important to offer consumers new services adapted to their needs, even if this is forced by a pandemic.”
Innovation is not possible without the appropriate legislation
Laura added: “The United States is the market with the biggest embrace of FinTechs, with the most renowned startups and the biggest investment capacity. However, the drawback for US is the fact that the success of these FinTechs stops at US borders. Why? The European Union market is highly regulated for financial services, probably the most regulated market in the world. However, there are states in the US which have increased their regulatory standards and the trend is rising.
Therefore, what Modex wants to offer is products and services which are already compliant with high regulatory standards, but keeping an eye on providing a satisfactory user experience. I would also like to point out that you can’t bring innovation if the legislation doesn’t allow that. And in order to advance, to make improvements, the public and the private sectors should work together, they should collaborate for a common goal.”