Like so many other industries, the world of banking is facing significant upheaval. New technology has disrupted financial institutions, many of which had allowed a state of inertia to develop as a result of market dominance sustained over a number of decades.
Today, new players are challenging that dominance. Regulatory changes and new digital solutions are giving individuals more options than ever before. Now, instead of conducting their finances with established banks, some customers are choosing to partner with fintech firms.
It will be interesting to see how more established banks react to these agile new competitors. They could remain set in their ways, believing their customers will choose history over innovation. At ActivoBank, we know this is a foolhardy approach: we feel that the fintech revolution will bring benefits to new entrants in the financial services market, as well as to established organisations and customers. Rather than fearing the challenges fintech will bring, ActivoBank welcomes them as an opportunity to gather insights about the market as it evolves.
On the same team
Since its foundation, ActivoBank has positioned itself as a digital bank, with the primary goal of giving clients a simpler but more complete offer than other players. This is becoming a bigger challenge every day as the speed and complexity of digitalisation forces us to innovate at an increasingly fast pace, particularly in the banking world.
Even considering the many ways fintech firms are able to outrun traditional banks, we won’t stop viewing them as a growth opportunity
In this context, it’s easy to see why established financial institutions see fintech firms as a threat. They offer solutions that are perceived by clients to be similar to those offered by traditional banks, but at a lower cost. In the majority of cases, fintech companies also demonstrate impressive dexterity, especially during the onboarding process, which may only require a smartphone and a couple of short steps. It’s important to note that fintech firms face different regulations to large organisations within the formal banking sector, meaning they can embrace new developments at a faster rate.
Yet, even considering the many ways fintech firms are able to outrun traditional banks, we won’t stop viewing them as a growth opportunity. By observing their operations and processes, we can learn how to improve our services and take advantage of innovative new approaches to banking. ActivoBank has partnered up with some successful fintech providers, which will allow us to offer our clients the best solutions at a fair price, without losing sight of the values that have always been integral to our corporate mission.
For banking incumbents to adapt to change, it is essential they are able to anticipate change and respond to it in an agile manner. To achieve this, ActivoBank has taken a multidisciplinary approach to the monitoring and evaluation of new solutions. We speak of a multidisciplinary approach because it is important to keep track of the fintech sector in a holistic way, understanding each organisation, its solutions, their impact on the banking sector, their user-friendliness and the advantages and costs for the client.
Designed for convenience
At ActivoBank, we align our objectives with the most secure technological developments available, in keeping with banking best practices. We are currently developing partnerships with fintech companies to further our vision of providing the best user experience to our customers. In 2019, we focused our efforts on international bank transfer technology; for 2020, we are predominantly interested in personal finance management tools.
ActivoBank is currently focused on digitalising all our banking processes in order to provide the most convenient service to our customers
We are also keen to ensure that we have a mobile-first banking solution that appeals to all our customers. Certainly, the Millennial generation values mobile-first banking because they have always known smartphones to play a significant role within their daily lives. However, it would be an oversimplification to suggest that only Millennials are interested in mobile banking: today, smartphones provide all generations with the tools for communication, work, daily organisation and entertainment.
Another social change that has made mobile banking an essential part of any financial institution’s offering is the desire for instant results. Very few people will go to a bank in person to deal with an issue, preferring to complete tasks remotely.
ActivoBank is currently focused on digitalising all our banking processes in order to provide the most convenient service to our customers. However, this is a challenging task. A bank has numerous procedures that must be considered during digitalisation, including opening accounts, providing loans and insurance, and processing payments and transfers. Before any of these processes can be revamped, a bank must carefully consider its customers’ needs.
While banks must tread carefully, they should not be overly cautious – digitalising services is the best way to keep up with changing customer needs. The most important thing is to continue analysing performance and thinking critically about whether new ways of operating are effective or not.
In 2019, we launched our new transactional app, which we redesigned from scratch. Taking into consideration the needs of our clients, the app allows individuals to quickly and easily consult their account balance, withdraw money, start saving and receive an immediate response to a personal loan request. Regarding investments, we have launched another app that allows clients to oversee market developments, conduct transactions and manage their securities portfolio, all with the speed required to find success in the fast-moving world of modern finance.
It’s important to remember that being a digital bank doesn’t mean being distant from clients. A client with a digital bank is likely to be more independent when making a decision, but bank employees should remain contactable to ensure they can support customers as soon as they are needed. ActivoBank is able to achieve this thanks to our precise customer relationship management solutions and our commitment to developing products and services that anticipate clients’ needs.
Clients must always feel like there is a human component to a digital bank so they know they can get in contact with staff or even visit a physical branch if necessary
Clients must always feel like there is a human component to a digital bank so they know they can get in contact with staff or even visit a physical branch if necessary. At the same time as being proudly digital, ActivoBank maintains a set of branches – called Pontos Activo – located in easily accessible urban areas and boasting generous opening hours. These branches give our clients the feeling of support that comes with brick-and-mortar outlets. Additionally, our personalised support line means we can always answer our clients’ queries. Of course, social networks have played an integral role in the development of customer service over the past decade: since 2010, we have been active across multiple online channels, answering questions, offering support and sharing information about new developments.
When deciding which functions to digitalise and which should be offered in a more traditional format, banks should remember what customers look for in digital services: autonomy, agility, speed and usability. Sometimes, however, people simply prefer the security that is offered by face-to-face interactions with knowledgeable members of staff.
Looking to the future, ActivoBank will continue to increase its client base, creating value and fostering long-lasting relationships. Digitalisation and innovation will remain the bank’s primary focus and we will continue to embody the values that are a part of our DNA: innovation, accessibility, simplicity, transparency and trust. In the years to come, traditional banking will likely cease to exist. Digital banks will thrive and will operate alongside fintech firms, benefitting from collaborative relationships. Banking will be faster, smarter, safer and more efficient. Institutions that realise this quickly have nothing to fear. If they embrace the change that is set to hit the industry, they can continue to play a major part in its future.