In 2019, with the help of multitudes of developers, big tech firms ventured into banking services. For instance, with a payment method that works around its software apps, Facebook announced Facebook Pay. Apple, in conjunction with Goldman Sachs, launched an Apple card. Meanwhile, while other firms are pushing more in-depth into the finance industry, other firms are still in their lending businesses. For instance, for the past five years, firms like Square capital profited more than $5billion. In 2017 Amazon offered loan services worth $1.5 billion to sellers and later reduced it to $ 1 billion in the previous year. Every quarter, PayPal acquired more than $1 billion on loans.
Uber created an Uber money division that offers financial service as a mobile banking app and bank account and debit card to help its customers and drivers. 2020 will see several big tech companies launch their financial services. Facebook is expected to launch Libra, although it has received a lot of opposition from government bodies. Google, in conjunction with CitiBank and Credit union, is strategizing to create customer accounts.
Banks and fintechs prioritize providing customers insights
An artificial intelligence software capable of advising customers on their savings, spendings, and financial goals was introduced by Huntington bank in 2019. Personetics’ Engage software uses predictive analytics to alerts customers on spending activities, upcoming bills, and subscription payment. In circumstances of forthcoming bills and overspending, wells Fargo uses the same predictive analytics to warn and give advice to customers.
Banks find additional ways to partner with fintechs
In the past four years, customers turned to digital lenders doubling their market share. Upstart and cabbage are among the digital –lenders licensing their software to banks. To improve digital appearance for deposit accounts opening products and loans, Blend is merging with BMO Harris Bank. According to Marcos Meneguzzi, fintechs took advantage of their knowledge of interest on the consumer for a loan. Through pre-approvals and quick funding of loans, they improved customers’ experience.
But new fights between the two sides will also break out
Most of bank’s clients are running to non-bank fintechs. Most banking customers were using digital-banking according to a survey conducted in the U.S for 1000 respondents. Later this year, Wethfront is planning to introduce mortgage as an addition to their high-interest cash accounts and automated investment account. However, the CEO of top banks are looking forward to coping with the Fintech challenge. For instance, Banco Santander will establish an unsecured consumer loan. Others like Bank of New York Mellons are planning to invest more in technology to assist them in the war against fintechs.
Further Reading: https://www.americanbanker.com/list/the-banking-tech-trends-that-will-dominate-2020
