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Fintech Is Disrupting Big Banks

Mobile Banking Application, Mobile Money Services, digital money, internet banking and many other Financial Technologies have changed the way people used to bank. Fintech is disrupting big banks.

Technology has altered the way in which business communicates with consumer said FaceMe Director-Government and Enterprise Mark Fitzgerald. But the technology brings with itself, some threats to the delivery of banking and financial services to the public.

By Pearson Mbendera

“It used to be quite simple. Customers arrived at banks through the revolving doors and opened accounts or applied for lending in-store. Banks owned the customer relationship by default and ‘see my bank manager’ was a common term,” says Mark Fitzgerald.

Here in Zimbabwe, a lot of banks have embraced this digital transformation and it has changed not only the way people bank, but the way banks serve their customers. Ecobank Zimbabwe embraced the digital transformation in a way that resulted in the bank streamlining of the bank’s physical branch network during the financial period by restructuring three unprofitable branches and replacing them with agency banking outlets.

While presenting the financial results for the year 2017, Ecobank’s Managing Director Mr Moses Kurenjekwa said that the bank is pushing ahead with the digital transformation of all of its business lines and delivery channels.

“The Bank is pushing ahead with the digital transformation of all of its business lines and delivery channels. Our role as a provider of financial services has undergone a significant transformation in order to remain relevant and serve today’s clients. The transformational mobile phone penetration has also introduced new avenues to serve our clients,” said Mr Kurenjekwa.

Investment in fintech sector is seen as an investment hot ticket. While the 2015 edition of the EY FinTech Adoption Index estimated that fintech was still in its infancy, the 2017 edition found that adoption had risen dramatically to one in three. “But while it’s clear that digital start-ups and first round investments in fintech are growing and that the digital revolution in banking is well and truly here, what hasn’t yet been mapped is the impacts on banking’s biggest players,” says Fitzgerald.

If banks want to win the game, they’ll have to win the customer relationship. If they don’t own that relational space, someone else will. The inconveniences with the ‘Swipe into EcoCash’ are some of the examples of the problems with fintech. But fintech is here to stay and it can only be improved upon.

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