Why Bankers Need to Think Like Entrepreneurs

Fintech has influenced both the banking and payments sector, but also the overall economic growth across many countries. Fintechs have harnessed the power of the internet, together with user-friendly smartphones to bring simplified access to financial services directly to the customer, with just the tap of a button. While fintech firms seem to be thinking like entrepreneurs, bankers are not.

In this article, we delve into the rapid innovation happening in the fintech space and how this is affecting the banking and payments sector. 

Banking-as-a-Service (BaaS)

Banking-as-a-Service, often known as BaaS, is essentially a form of a business model that allows non-banking businesses, in particular, to offer services that are typically associated with banks or other financial institutions. By using BaaS, non-banking businesses are able to provide financial services to their clients without first having to obtain a banking license.

Through the use of BaaS, almost every service provider has the ability to provide their consumers with white-label debit cards, a routable account, a store of value, and several other integrated financial solutions. 

Embedded Finance

The incorporation of financial services is made easier with the help of embedded finance, which can be used for almost any kind of company. Embedded finance makes it possible to provide customers with easier access to financial services without having to divert them to a separate organisation. A company can give their customers access to the services they require, directly when they need them – by integrating financial services directly onto their website or mobile app using embedded finance. 

While fintech has not yet replaced traditional finance, it has certainly resolved a number of issues that previously acted as a barrier to accessibility, especially in developing countries.

Bankers Need to Adopt a Culture of Innovation 

Fintechs have a culture of innovation, while bankers and banks do not. Traditional banks are often slow when it comes to innovation. Why? Because they already have a massive customer base.

Finches on the other hand are relatively small when compared to traditional banks and have a hunger for new growth. They listen to what consumers want and provide them with innovative banking solutions. Fintechs know that traditional banks and bankers are slow when it comes to innovation and they’re ready to take advantage of this. After all, they have to. Their business depends on the innovation they provide. 

Bankers need to adopt a culture of innovation or face the risk of losing a large portion of their customer base to fintechs. Why banks may not feel the effects of slow innovation right now, but they most certainly will in the coming years if they fail to adopt a culture of innovation. 

Bankers need to become more agile, move faster and explore new technologies otherwise face the risk of being out-banked by modern fintech disruptors. Strategic financial software and services can enable bankers to stay ahead of their game by enabling the speed and agility they so desperately need. 

Fintech has impacted not only the banking and payments sectors but also the overall economic growth across many countries. Through the use of mobile phones and the internet, fintechs have simplified access to financial services and provided them directly to customers. Bankers think differently than fintech firms, and this is why bankers need to think like entrepreneurs.