Competition for the banks? – Loan without credit bureau
November 11, 2019
Banks have become firmly established in our everyday life. Banking systems have actually existed in Europe since the 13th century. For this reason alone, one might think that it will stay that way – even if not always for a long time. But recent developments show that it may not be safe.
Where is it at the banks?
If you look at banking behavior from a customer’s perspective, you can see some things that you would like to have different. ATM fees, high interest on overdrafts, strict regulations on lending, semi-motivated employees – just to name a few. The cases are not new, but banks do not want to or cannot react to them quickly enough. It wouldn’t be bad, especially for the banks themselves, if we weren’t living in the age of digitization.
The digital economy is developing according to its own rules. The basic rule of the digital economy is that as soon as costs are higher than necessary (which banks only have because of branches) or barriers (opening times and waiting times would be good examples of this), new business models emerge. And these then attack banking areas.
Current developments in the financial market
If you follow the current developments, you know that there has been a lot of talk about financial technology (FinTech) in recent years. The services that Fintechs offer customers are much cheaper, more modern and more convenient compared to banks. Fintech services are particularly popular with young people. It is only a matter of time before it spreads well among older people. One thing is certain: Fintech products meet consumer expectations precisely where the banks do not, for example with simple payment, real-time feedback on inquiries or various bonus programs.
In fact, the area has developed very strongly, so that even the best economists and financial tycoons see a future in FinTech and traditional banks predict a smaller significance than currently in the foreseeable future.
Cryptocurrency Bitcoin is another innovation that concerns banks. Bitcoin is a digital account statement that decentralizes payments and makes them independent of banks. Bitcoin payments are now accepted in many online shops, but also in various local places, with service providers, etc. Cryptocurrencies are putting banks under pressure and letting them think about how they can be used for banks.
Technology threatens tradition?
The fact is: traditional banks lose customers, whether to online banks, financial technology or other service providers. The cryptocurrency also makes banks appear superfluous. These are the trends that have been on the market for years and are becoming increasingly popular. However, the development is rapid, so that the banks have to react and act quickly in order not to miss the right moment to make the two – currently still competitors – a cooperation partner. Because it is an advantage for all sides to use the advantages of others and to benefit from them. Banks just have to relax their somewhat rigid rules to become more flexible. Because only then will everyone ultimately win – even without waging war – the customers.