Financial technology presents opportunities and a new set of challenges as the industry enters 2017.
Over the past five years, the financial services industry has changed a lot. Today, consumers can manage budgets using their smart phone, pay friends back with just a text or email, and apply for a credit card completely online. FinTech, or financial technology, has changed A LOT.
What could 2017 possibly bring us? Find out what industry experts think may be next.
Editor’s Note: The following is an excerpt from a recent AZ Business Magazine article.
Whether you’re the CEO of a bank or a consumer looking for an auto loan, FinTech allows companies to serve their customers better and makes it easier to get paid for your goods or services, but it also presents challenges.
“Banks are becoming technology service firms that just happen to sell financial services,” says Cathy Cooper, executive vice president, Retail Banking Group at Washington Federal. “It has become a central component of every strategic initiative we undertake.
The effort is vital in today’s tech-drive business climate. To keep up with the competition, traditional financial services firms have ramped up their FinTech efforts dramatically and the effort is paying off. Mobile banking apps from JPMorgan Chase, Bank of America, Capital One and Wells Fargo ranked among The Top 10 U.S. banking and FinTech apps in 2016, based on ratings. Although they lack bells and whistles packed into other more innovative apps, traditional firms score higher in fraud protections and transparency, two key concerns for FinTech customers.
But mobile apps are just the appetizer in terms of how technology has transformed the financial services sector. Email and text messaging have also turned the industry upside down. “There has been a dramatic migration to electronic communication with clients and other financial institutions, accompanied by an equally dramatic increase in requirements and focus on cybersecurity,” says Eric Nystrom, director of process and technology at MRA Associates.
“Across the board, today we are almost exclusively using encrypted web portal and email communication with clients and other financial institutions, where five years ago we used U.S. mail, fax and telephone communication.”
“There are new types of payments contemplated every day, whether it’s paper-to-electronic, peer-to-peer, real time or mobile transactions, and we need to be able to continually enhance our offering to keep up with – and lead this – positive momentum,” says Jim Petterson, CEO of UMB Bank’s Arizona Region.
“That’s where FinTech can play a role and provide a great way for us to work with those entrepreneurs to create the symbiotic relationships between banking and emerging technologies.”
The greatest threat to the financial services business continues to be the theft of access tokens, credit card numbers, PIN codes and passwords, experts say.
“The relationship between demand for more convenience and the need for increased security will continue to be a difficult balance for financial services businesses,” says Michael McAndrews, director of network security services at WGM Information Security Services in Scottsdale, Arizona.
What's up for WAFD + FinTech in 2017?
"The opportunities are tremendous, but we’re staying focused on those that make us ‘easier to bank with.’ We’re also aware that consumer expectations around technology and service delivery are built by quality organizations outside the financial industry and that banks need to think like retailers and like technology companies when deciding which strategies to deploy," says Cathy Cooper, executive vice president and Retail Banking Group manager for Washington Federal.
Check out the entire FinTech Grows Up article to find out more.
Our new branch in Ashland, OR combines personal, face-to-face service with the latest in banking technology automation.