Banks and Fintechs-A Better Value Proposition

By Steve Ellis, Head-Innovation Group, Wells Fargo

Steve Ellis, Head-Innovation Group, Wells Fargo

Over the last 30 years, the world has become increasingly computerized. We’ve traveled through the discovery and subsequent commercialization of the internet, the birth of and increasing ubiquity of mobile phones, the rise of virtual social platforms and services, the rise of big data, and the subsequent shift from typing to real-time video and chatbot interactions. Today, we’re in the beginning of the rise of rich curated media tailored to the individual. As we navigate this new paradigm, it’s more important than ever before to remember it’s not just about cool technology—it’s about people and communities. There is no use for technology without you and me.

"The marriage of tech, through collaborations between fintechs and financial institutions, will yield innovative solutions"

With the constant revolving door of emerging technologies, questions are continually asked about the impact on each of us. Many of these questions have a negative or downward feel to them: Are we’re losing our personal connections? Are we becoming more isolated from others? Are we giving away or losing our humanity? Are we becoming more ’robotic’? Are we becoming subservient to the digits, the ones and the zeros?

My response: Hardly.

While the world is more ‘techie’ than ever, connections to others continue to evolve, and in many ways, enable more personal interactions.

To say it another way, it is not about the virtual world versus the physical world—it is both together. 

Many basic transactions that used to be done with paper or ‘sneakerware’ can now be done digitally. Faster, more efficient, safer (yes without a doubt safer! The numbers speak loudly about safety). But how about advice and counsel? Thinking through long-term options? Robust discussions? Shaping ideas? While technology can assist, shaping inventions and guiding us forward is about human creativity and ingenuity. Digital and people together, not separate. 

We see this playing out in the financial services-oriented businesses. Fintechs—financial services and emerging technology-based companies—are people with creative ideas providing new value for consumers and businesses. Fintechs are playing a crucial role in this revolution. Small and large companies, and banks are becoming more “fintechie.” The two together shaping the future of financial services—sometimes viewed as collaborators, sometimes viewed as competitors. Whatever way you slice it, fintechs and financial institutions are working toward the same thing. Ultimately, the most innovative solutions will be a product of both fintechs and large banks such as Wells Fargo—the new kids on the block, and those of us that are 160-something years young.

It takes a lot of experience and focus to successfully navigate the global regulatory and legal frameworks that enable commerce; a place where banks big and small have literally hundreds of years of experience. Fintechs see the opportunities of emerging technologies, and working with a larger financial institution with its more substantial resources and experience can help scale those solutions to a broader demographic.

Customers now expect companies to know them, anticipate their needs, and meet them where they already spend their time. Today, using reams of data and leveraging increased computing power can enable us to deliver contextual, tailored experiences to each and every customer, in the moment, wherever they are, in a seamless fashion.

And it’s not just customers who will see new and different experiences—it will change almost every facet of businesses and daily interaction with the world around you.

For banks and fintechs, the opportunity is to bring to life a world where you manage your money with voice and touch—an evolution of how we have all interacted with each other for thousands of years. Where intuitive tools are at your fingertips to help you navigate your finances—and see further ahead to help put you in control.

There are a variety of technologies coming into play that are influencing the industry, including:

Artificial Intelligence (AI): While AI has been around for more than 60 years, it’s really only now beginning to gain significant industry traction, leading toward solutions and insights that will help consumers better manage their finances—all powered by the data. The key areas to watch around AI will revolve around: natural language processing, or the ability for digital devices to understand the human voice and prose in a more seamless fashion; machine learning, which allows computers to create rich insights out of vast quantities of data; and automation, which translates repetitive manual tasks into automated routines, reducing monotonous tasks for front-line and back-office personnel.

Application Programming Interfaces (APIs): APIs creates flexibility and quick responsiveness to infrastructure of individual companies and enables the easy inter-connections across companies which drive new distribution channels and new kinds of values to consumers and businesses. Built right, it creates an environment for the exchange of information across many different platforms and interfaces by creating a common language, process and infrastructure for those interactions, allowing companies all over the world to reach new audiences, help reduce risk, and bring new value to their customers.

The marriage of tech, through collaborations between fintechs and financial institutions, will yield innovative solutions. All while keeping the customer at the center of that innovation. 

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