With the invention of Blockchain Technology, it’s hard to overlook the disruption it has posed to be for various sectors including fintech and banking. Fintech is now an established sector with more than 5000 established companies running financial services with technology as their sole platform of trade. Also, at a stage of growth wherein; there are infinite possibilities to be explored over. The integration of blockchain can assure more transparency, affordability and security to their transactions and products.
As and when Bitcoin was launched in 2008, it was applauded for bringing a decentralised system of trading, which was something of monetary value. Its success today is a proof of concept for various blockchain establishments utilising this technology as their base of operation.
The idea wasn’t to challenge the traditional banking systems and their bureaucratic nature of operations. But a foolproof opportunity to make a transition into the future of banking.
Firstly, the banks were shy to make a transition to digital banking. Whereas, digital banking is now positioned to be a trendsetter, too good to be avoided for its purposes set forward today or tomorrow. A key differentiator of this aspect is the advent of fintech banking with an open-API banking approach. This allows your platform to integrate seamlessly with other fintech products and services.
Herein, the fact remains that no typical bank could deliver all of its premier financial services/products on a single platform for its customers to access and process upon. The customers need to invest their time and effort in navigating through different banks and fintech platforms to settle upon a product/service that best meets their needs. This defeats the purpose of having a systematic approach to any requisition of your customer base.
The chaos adds upto confusion and loses any traction from genuine buyers of the integrated services. And such cases are widely accepted among the masses in the form of a lack of clarification and ramification of products.
Your customers need to be directed to a single host that can cater to the need of the hour. A blockchain ecosystem can resolve the conflict and ring in the most optimum manner, an interface accessible to their requirements. Pivoting into new and experimental business models can be high-risk with profit margins and NPA backlog already taking a toll on the balance sheets of banks. A lot of growth capital cannot be invested upon such explorations.
Hence, this momentum can be built by experimenting with one or two services at a time, and the biggest game-changers can be fintech startups, who can utilise the startup capital/fund from banks and resource this task as an opportunity to grow in this space or schema of things.
Challenges remain and actions like Compliances, and KYC Requirements can pose various complications, but it can be designed and tailored for the partners and banks equivocally to avoid any complexities.
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