On a day-to-day basis, especially in recent times, but actually since its appearance, the fintechs (word that arises from the union between the words in English finance and technology) have gained more and more presence in the business ecosystem.
And the figures that account for the growth of this sector, which includes companies that seek to simplify and automate financial processes, demonstrate this. According to a study by the Startup Ecosystem platform, in 2021 companies of this type in Spain received 481 million dollars.
But when you talk about the fintech explosion, it’s hard not to think about what has happened in the midst of this revolution with traditional banking. In a post-pandemic scenario, with multiple changes in the way of working, user needs have evolved and traditional financial institutions have had to reinvent themselves to meet the challenge. Contrary to what is usually thought, today both structures coexist in harmony with the aim of offering customers the best of both worlds.
When unity is strength
From the 70s when the first fintech was created to the present day, the relationship between both business models has not always been the same. Initially, these innovative startups were perceived by banks as a real threat.
«In large part due to the flexibility that new technologies allowed them to offer their clients at a time when traditional banking entities were beginning to fall behind with archaic and often complex procedures. Without forgetting either the strict regulatory framework of the latter, which made it difficult for them to apply changes as quickly as the market demanded. In addition, fintechs had another huge advantage: they were accessible 24/7 through a computer or a mobile application, without the need to go to a branch in person”says Karim Jouini, CEO of Expensya.
Given this reality, the possibilities of collaboration began to be considered no longer as a possibility, but rather as a necessity. So much so that, according to a recent PwC study, 82% of traditional financial institutions plan to strengthen their partnerships with this type of startups in the next five years.
Working together with fintechs, banks can incorporate innovative technologies (Artificial Intelligence and Big Data, for example) to offer an innovative digital experience that is in tune with current demands. Startups, for their part, by allying with traditional entities, can benefit from their broad customer base to gain market share and become more profitable, as well as their infrastructure and investment capacity.
In this way, banks and fintechs thus form a powerful duocapable of responding to one of the main priorities of users in the digital age: agility and comfort in financial operations.
