Ajay Hans, CEO and founder of Mobetize joined Sunil Madhu, Founder & CEO of Instnt in the second episode of this podcast series, discussing the challenges for instant digitization by banks brought on by the pandemic.
Fintech newcomers are not bound by geography, time zones, or real estate. Without significant capital expenditures, startup financial services organizations are able to put their brand into the hands, literally, of millions of potential customers.
The market is demanding a fast and frictionless experience when signing up and creating accounts. However, compliance, including the handling of Know Your Customer (KYC) and ID verification, is a competing priority which still must be handled laser-fast in the background, so as not to disrupt the onboarding process and turn away potential customers eager to get started with an app.
However, smaller banks and credit unions are challenged to compete with such startups, because the majority of them still use older, clunky legacy systems and inefficient, manual processes. Such systems do not meet the needs of — and might even turn away — younger customers who might be swayed by the convenience and user-friendly interfaces of digital and mobile-first experiences offered by fintech newcomers.
Credit unions are realizing that they can’t go through this alone, as innovation is needed for customer onboarding and the complete customer journey. They will soon adopt the idea of “open banking,” which is about adopting technologies to make it easier for customers to do business with them.