Tech Giants Disrupting Finance
Today, it’s no secret that some of the top tech giants are on a mission to achieve consumer dominance. This is obvious in many industries that have been previously disrupted like print, film, retail, academia, etc. which can be attributed to some of the top global tech companies. As major tech organizations set their eyes on the finance industry, they all share one underlying common denominator; indispensability. Amazon, Apple, Google, Facebook and others are competing to win the attention of consumers as the most favorable platform. And while it may be a cutthroat competition, the finance industry is being forced to face it’s greatest fear of potential displacement.
According to a 2018 executive survey, almost 80% of executives were fearful of the risk of disruption from agile competitors and the impact that the risk would have on their firms. Disruption has now forced financial institutions to play catch up. While many traditional banks have begun adapting to consumer behavior by creating mobile applications and payment services, tech companies are seeing opportunity beyond the services offered that lie in the data. As a result, tech companies are moving in on the industry and making some improvements such as updating online payment systems and creating smart checking accounts.
Previously, tech companies began slowly invading the finance sector by introducing new payment channels and credit cards for consumers. Amazon, for example, offered credit cards with the intention to boost it’s business of e-commerce. Facebook launched Facebook Pay to work in tandem with its messaging app to streamline the social platform’s engagements among users. Apple and Google released Apple Pay and Google Pay and removed the physical use of a credit or debit card, entirely.
Tech leaders are gearing up to further penetrate the legacy industry by offering more valuable consumer experiences. By leveraging consumer data correlating with spending and saving habits, tech has identified an opportunity to further suggest products such as credit cards or mortgages that align with consumers interactions and behavioral patterns. The goal is to personalize the consumer experience when managing their personal finances beyond conventional bank capabilities.
So what does this all mean for the finance industry? The tech companies disrupting the finance sector pose a massive threat due to their size and following. Traditional institutions and decision makers are making last minute investments in technology noted to transform the industry such as artificial intelligence, robotic process automation, blockchain, and more.
For many firms, technology is the path that takes a concept and a new and novel approach from adoption to successful implementation. It represents the bridge liaison between adoption and successful implementation of technology. Financial institutions are likely to continue facing operational challenges until they are able to adapt to innovative fintech solutions in order to remain competitive in an industry that is on the cusp of disruption.