Can Big Banks compete against agile Fintech start-ups?

Over 17% of the European Banking Industry is less than 13 years old. Often these are young agile tech innovators, without the anchor of antiquated IT systems. These new Fintech companies are disrupting the banking market, and amass one third of all new revenue created.

Mobile Banking apps are a staple of financial institutions, but a digital portal to their brick and mortar offerings is no longer enough. Not when digitally native Fintechs evangelise their dynamic new features and functionalities, all easily accessible through the computers in our pockets.

[Click here to skip straight to ‘5 advantages of a MVP Fintech App’]

Founded in 2015, Monzo is a prime example of the new contenders. With only 300 staff they have over 1 million customers. Monzo evangelises solutions for notorious banking pain points, such as their one-click Couple Account creation. Bypassing the hassle of scheduling a morning to present gas bills, paychecks, and mothers’ maiden names. Protected by the Financial Services Compensation Scheme, they gain loyalty from their customers by offering a fully tailored and accessible service.

Not to be outdone, CYBG invested in developing their flagship app ‘B Currency’. CYBG’s first step was to conduct customer feedback analysis to identify a commonly recurring issue. Whilst their customers travelled abroad, they were getting confused and frustrated by the constantly fluctuating exchange rates. Simple transactions were needlessly confusing, all they wanted was a quick and easy way to understand costs… without the hassle of manually inputting data.

With Waracle’s expertise the B Currency app combines multiple technologies to present an ingenious solution. Optical Character Recognition software, near-time currency conversion APIs, and GeoCoding, enable the app to automatically convert any physical price list into the user’s native currency… just by pointing the phone’s camera. Menus, shop displays, and even taxi meters instantly transform in front of your eyes, informed by the latest exchange rates.

And that is just the tip of the iceberg.

By identifying and offering the digital tools demanded by their customers, Fintech Apps have become hyper-relevant. Simplifying the life of their users, helping them save both time and money, it is leading to a mass exodus from traditional banking.

Traditional Banks must adopt a data-driven digital mentality to drive growth and retain their customers’ loyalty. Whilst many were too cautious to adapt earlier, it opened the door to a plethora of successful Fintech start-ups. But there is still time. Embrace the change and divest, or risk being forever known as the previously relevant “Jurassic Banks”.

There will always be legacy DNA, the unwieldy data formed through years of migrations, mergers and acquisitions. But by exploring a Minimal Viable Product, a specific digital offering, Big Banks aren’t impaired by their notorious digital infrastructure. It can be simple, it can be clean, and it only has to streamline one problem away for its users. Investing in a MVP is both technologically and economically savvy, it allows you to test the waters with a scalable product, and be agile enough to stay ahead of the curve.

Whilst ROI is impossible to predict, the revenue lost to Fintech start-ups is all too clear. Can traditional banks really afford to not spearhead the digital future of the finance industry?

5 Advantages of a MVP Fintech App

Cheaper costs and better engagement

The MVP approach focuses on the barebones business model, it is highly targeted and takes far less time to develop than an app full of bells and whistles. A well designed MVP app vastly reduces staff workload. It allows the developers to focus on that single most important pain point, and test the result early on.

Additional features can be added after being triaged and tested, but it is essential that every new feature increases value. These additional updates are brilliant for keeping your customers engaged and app rankings high. It provides the early adopters with news to spread around their own social spheres, creating an influx of micro influencers evangelising your message and driving app growth.

Access to the most active marketing platforms in the world

The App Stores are the world’s largest and most accessible marketplaces. Even after the multi-million cull of low-quality apps, Google Play and Apple’s App Store showcase over 4 million apps. According to Statista, over 90% of UK adults are active smartphone users, and Fintech apps offer them greater levels of interaction and flexibility (especially handy for commuters).

Big Banks have a serious advantage over Fintech start-ups when it comes to App Store Marketing. A skilled ASO Manager can use your brand identity, existing SEO benefits, and other tricks of the trade, to create an app that competes for the top spots from Day 1. Through targeting organic user search patterns, it is possible to maximise your audience by offering a solution to their problem.

Scalable Success

Fintech Apps can be designed with cloud technology, through full scale migrations and hybrid approaches. It is cheaper, flexible, and has no need for hardware. When security and functionality are more important than time, the ideal solution would be to create a bespoke cloud-native AI to analyse the data. This would solve a lot of the data challenges inherent in traditional banking, and is scalable on demand.

Implementing open API development allows services to be fulfilled by other Fintech companies, bypassing the minefield of legacy systems. In short this allows you to repackage existing functionalities for your clients, and scale these services to match user engagement.

Clean Data

If Data is going to be used effectively within an organisation, it needs to be accessible, identifiable, accurate, and secure. An independently functioning MVP Fintech App solves provides the opportunity for a fresh data start. Efficient and optimised frameworks, neatly filling with information, providing a gold mine data scientists.

Agile Optimisation

Through data analysation, banks can focus on driving their top-line revenue, and enrich their clients’ lives. Exploring datasets and A-B testing, allows banks to optimise their offerings. Tweaking and tailoring a dynamic approach to produce trackable improvements in areas such as customer acquisition, cross-selling, and loyalty.

Wondering how your business could harness these disruptive technologies and innovative opportunities? Click here to get in touch and kickstart your digital transformation!

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