It is very difficult to displace consumers from the comfort and familiarity of traditional financial institutions. However, the recent proliferation of Fintech startups is sure to give tough competition to traditional banks and credit unions.
In 2020 alone, fintech startups got $44.1 billion from venture capitalists. In 2009, this figure was a paltry $1.1 billion. It is clear that the market experts understand the potential of blockchain, digital banking, and artificial intelligence-based predictive analytics and are putting all their money into fintech.
The Growing Popularity of Digital Banking
The use of mobile apps for financial services has seen huge growth. The traditional spray-and-pray messaging by banks and credit unions through cold calls does not work anymore. Consumers are hungry for technology-driven personalized, on-demand banking.
This can streamline banking services and cut the red tape, making the consumer save time & energy. Artificially Intelligent apps can provide users with specific custom tips and recommendations to help them navigate the complex world of finance – in the same way as ‘Netflix’ recommends shows to its users!
Using Gamification to Educate and Engage Consumers
To stand out from other financial institutions, fintech start-ups are gamifying their platform to engage and educate users. By gamifying a process, you make it more enjoyable and gratifying for the user. This is why most people stick to their phones playing games like Candy Crush for hours on end!
For example, the ‘Dhani’ app is helping users attain financial wellness by providing tailor-made advice and loans on the go. After introducing the ‘Spin the wheel’ mini-game in the app, they saw around 90% of users are using the app for much longer.
They recently came up with the concept of ‘loyalty points, which lets users convert in-app rewards into digital money. More and more people are using this app to pay for monthly installments and even healthcare.
The Advent of the ‘Everything App’
Many apps that originally came into the market as communication apps are now letting users make and accept payments through them. This will eventually shape the ‘everything app’ which will let users do anything and everything, maximizing engagement, interactivity, and communication between users.
This all-encompassing finance app will also integrate third-party technologies to elevate its functionality further. The user would never have to leave the app or depend on any other app. These activities can include mobile recharges, bill payments, loan applications, booking gas cylinders, etc.
Conclusion
In the realm of globalization, businesses will not have geographical dominance. Tech giants will want to dominate the global market with their proprietary ‘super app’, helping the user to complete all kinds of tasks, financial or otherwise.
This will eventually give rise to a fully dynamic, financial operating system. It will help users by improving their finance game in the short run as well as in the long run. So, most traditional banks and other financial institutions should buckle up and adopt these strategies to remain competitive.
The article has been published by the editorial board of the Fintek Diary. Happy Reading. For more information please visit www.fintekdiary.com
