Working in fintech in the 2010s, I saw how tech totally transformed banking. But now, as the 2020s gather pace, those of us in fintech are looking far beyond that. We’re using tech to completely reimagine what banking even is.
Customer experience is now front and centre
If the rise of the challengers has shown us anything, it’s that customer experience is a big deal and customers are willing to move to find the right experience for them.
But it goes beyond that. It’s not all about just looking the part. RBS’s failed Bó project told us that. It’s about solving problems. The challenger banks’ initial success came from offering a modern type of banking that customers just weren’t getting from traditional banks. Well, problem solved. So what’s next?
Banking is getting personal – really, really personal
As we go about our lives using our debit and credit cards, we’re leaving a footprint, creating a digital persona just like we do on Google or Netflix.
Utilising this data is what fascinates my team and I at AAZZUR where we work with organisations to create hyper-personalized customer experiences that offer financial add-ons customers genuinely need when they need them. From the most specific insurance types to wealth management, travel money to carbon offsetting, all triggered by specific transactions and spending patterns.
Hyper-personalization in banking is getting a lot of coverage right now, with a recent Deloitte report suggesting banks that “deliver true end-to-end hyper-personalised products and services will create a significant advantage over their competitors.”
For us, the most exciting bit is that it won’t just be banks doing this.
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“Every company will be a fintech company”
Embedded finance is something I spend a lot of time explaining to potential clients.
In summary, it’s the embedding of financial products into the commercial sector. Klarna, for example. But the possibilities go far beyond just short term, POS loans. Now any retail business can offer its customers an ecosystem of personalized services.
It’s no surprise some estimate embedded finance could be worth 6.3 tn€ over the next decade.
Competitors are becoming colleagues
The thing I love most about modern fintech products is how APIs now allow providers to integrate their services into other systems and vice-versa.
This creates ecosystems of financial products that genuinely improve customer experience. Plus, it’s profitable – something especially rare for challenger banks where only 5% worldwide have broken even.
Starling, the largest consistently profitable challenger bank, is a prime example of how successful this model can be. It simultaneously offers its payment rails to companies like Raisin and MasterCard while providing its own customers personalized services from companies like Wealthify and PensionBee.
But as I said, these ecosystems are no longer just for banks. I know because this is something I see every day at AZZUR and it’s perhaps the starkest example of how tech has reimagined banking.
The original rules simply don’t apply anymore.
Written by Philipp Buschmann, Co-Founder and CEO at AAZZUR