Banking or Banks !!  –  The concept of banking is crucial, but the importance lies not solely in traditional banks. The emergence of Fintech is threatening traditional banks but instead of resisting the change, banks should embrace it. Banks have no choice either form the partnerships with Fintech companies or accept the fact in plain words “Fintech in Africa: The end of the beginning”.

This article is purely from my own assumptions and experience and not a conclusion. The post was first published on disruptive views dot com “For Africa will FinTech Reign“. Focus is on the issues of banking services and trends around banks, banking, FinTech & financial services.

Happy New Year to all my readers

Banking or Bank  – Two are not coupled any more

It is essential for banks to break free from their outdated mindset and cater to the ever-evolving banking requirements of customers to ensure their survival in the long run. Banking will survive but not banks may not.

In my learning and understanding of developments taking place around payments, payment methods across the globe are changing on an almost daily basis. Paymentintelligence is helping us to avoid creating a creative mess, stop innovating, and start improving based on the data we have. Test, measure success, and repeat what works well (of course, the innovation process does not stop completely).

Developing something new on top of the old legacy system neither works (in most cases) nor answers the problems at hand. Sometimes undeveloping something existing can uncover hidden gems that are also very useful. As I say in my style, “Let’s Un-Develop to Innovate?

What is needed, Banking or Banks?

This is part 2 of my earlier post on December 26, 2014, “Will banks ever be successful in mobile money or mobile payments?” Artificial Intelligence has brought freshness to the financial services and payment service industries with the help of big data, which has just started growing. Currently, markets daily needs are shifting to more digital channels. Mobile wallets are one solution to this scenario.

The classic example of this in AI is a critical tool to improve customer experience, i.e., facial recognition technology, which is 10 to 15 times more accurate than human beings at identifying people. Innovation, which is fueled by advances in computing power and connectivity, has grown rapidly in the fields of robotics and artificial intelligence. The amounts that have been invested so far by FinTech disrupters are still relatively small, and incumbent banks and finance companies will also start adopting some of these technologies.

FinTech Provided Banking

As rightly said by many experts in interviews and on their blogs, more transactions yield more revenue. Actually, they mean more transactions out of the data that gets collected at the backend.

Financial inclusion is all about accessibility and affordability, but the aim of FinTech is not the same. In this era of service excellence, we need to put ourselves in the customer’s shoes to gain the correct experience. Some FinTech companies offer convenience, and as a result, they are attracting more customers. While banks claim to be cheaper in some cases, they have fewer customers as they lack innovation, creativity, convenience, accessibility, availability, and affordability.

Financial technology, also known as FinTech, is a line of business based on using software to provide financial services. Financial technology companies are generally startups founded with the purpose of disrupting incumbent financial systems and corporations that rely less on software. FinTech keeps Artificial Intelligence and Data Science in the basement, becoming the most advanced, innovative, and transformer for the payments world on the top level.

Coming back to financial inclusion, which is extremely sensitive to cost and convenience, and getting familiar with AI, data science, and big data to cut costs and offer more affordable services Because affordability is a need due to the fact that in most cases the target segment was excluded by the financial institution for various reasons like remote location, economical standards, and informal environments, In some cases, they were forced out due to KYC needs and account maintenance fees.

AILabPage – FinTech keeping artificial intelligence and data science at the foundation layer, where they belong, as partners to power up the whole thing. Rising to the highest level as the foremost leader in revolutionizing and pushing the boundaries in the field of electronic payments and financial inclusion

Welcome To The Realm Of FinTech

There is a very old philosophy of door knocking by opportunity and making a door for the opportunity,” but the way I see this is totally different. The first scenario – Knock Knock … who is it FinTech… Bank (feeling very lazy and suspicious) shut the door on its face. Now look at the second scenario: Knock Knock. Who is it? FinTech, MNO, etc. I got excited and was welcomed with open hearts and arms. Because fintech was never treated respectfully by banks, now fintech is killing banks but not banking.

Over the years, the fintech industry has acquired extensive experience in addressing Africa’s business, consumer, and technology challenges. Not stopping but continuing to broaden the boundaries and scale to improve people’s lives. By providing and developing a broad range of innovative solutions and services. On the other hand, banks’ restrictive approach when it comes to onboarding customers means that in this world, all typical bankers have failed to understand or set up the change in the basic business model because of their restrictive approach.

Mobile payments in the FinTech market will grow exponentially. We are sure that both players will adopt the mobile device (to run internet- or data-based mobile apps) or real mobile phone (to run on GSM/3G/4G networks) as an official and convenient gateway for their financial requests, and we will see unlimited options and innovative solutions that are built and based on mobile handsets.

Banking or Bank or FinTech-King

I can confidently state that banking is essential, but not necessarily the banks themselves. Rather, it is the growing influence of fintech that poses a great threat to traditional banks. To remain relevant, banks must be open to embracing change, collaborating with fintech companies, and abandoning their outdated practices.

Failure to do so may result in the demise of banks while the concept of banking itself still endures. It is premature to determine a decisive victor in the mobile payment industry, given that this era has only recently commenced. “We will have to observe the outcome and anticipate a potential impasse, which may not be favorable for a particular role.”

Leveraging digital channels and operations will allow banks to also cut the cost of serving the market while acquiring new customers and increasing profitability, but bankers still think it’s not enough, and they still need a compelling digital value proposition incorporating financial and non-financial needs that will help customers grow their businesses and improve their own needs.

Demand for upstart services is strong, piqued by widespread frustration with big banks; supply was or is growing, fuelled in part by financial types itching to do something. Low interest rates have made capital, the raw material for many money-related startups, cheap and plentiful.

Pain or Cost – Will go with little Cost

Convenience, among other things, focuses on how easy it is to use MFS or FinTech agencies and how easy it is to send and redeem funds. The network of the MFS, etc. Thus, subscribers are praying for a balance in both, and FinTech is taking full advantage to act like a god. The more innovative banks are less likely to need other solutions.

Fintech is doing its role very effectively, even joining forces with the new competition. Neither banks nor any other stakeholder can do it alone. To get to scale and truly build long-standing relationships with the different segments, collaboration with a range of ecosystem partners is absolutely critical.

Cross-industry partnerships present an opportunity to offer complementary financial and non-financial products that service providers might not have been able to offer otherwise. So here comes Fintech; please welcome it.

The fintech industry came to life and became one of the most promising industries of 2015, and it looks very confident to continue in the same light in 2016 and a few years more. “It wasn’t an interesting space to be in just in 2012, as I recall. “The view was that there are just such strong monopolies there in terms of the existing banks, and no one’s built a successful payments company since PayPal and plastic money companies.”

Financial Services Intelligence – Payment Intelligence

MaRS’ Financial Technology (FinTech) Cluster connects the financial services sector with startups developing next-generation technology in emerging payments, financial services, peer-to-peer transactions, alternative lending, and crypto-currencies. Fintech startups have the most comprehensive set of resources across the world, and their vision is soothing to the world and people’s lives, giving them another reason to live long and grow in folds. Killing everything that comes in the way of innovation.

Through a strategic network of partners, technologies, tools, and people with the vision, FinTech entrepreneurs gain rapid validation, access to investment, product feedback, sales opportunities, and business advisory services.

At that time, it was seen as a highly technical and highly regulated industry dominated by giant banks that resisted disruption other than the occasional global meltdown. Finance is now riding an entrepreneurial wave. Financial technology, as “innovation in financial services,” at first targeted the banking and insurance sectors as potential business sectors to disrupt. If you tried to open a new bank account, you would be requested to deposit a sum of a few thousand in the case of Asia and a few hundreds in Europe and the Americas in average of your local currency, while with only a few cents you could get yourself a new SIM card and start transacting immediately.

FinTech companies often face doubts from financial regulators along with tough competition from established players. The online financial sector is also an increasing target of distributed denial-of-service extortion attacks. This security challenge is also faced by historical bank companies since they do offer Internet-connected customer services.

Why Welcome FinTech

Despite all the challenges, issues, and natural and industry-created bottlenecks, FinTech is experiencing tremendous growth. FinTech is on the rise, and the boom within the sector is exponential. FinTech startups are enabling services like peer-to-peer money transfer and instant payment for goods and services with the help of mobile device-based services like mobile applications, USSD, NFC, QR Codes, etc. And lending services are also on the rise. FinTech companies got billions of dollars in funding in just the last 12 months, which is a very clear sign of confidence and a bright future.

FinTech presents enormous opportunity for entrepreneurs in insurance and shows that incumbents are recognizing the potential for startups in the insurance sector. Despite being such a large industry, insurance remains one of the highest-cost areas of financial services.

Banks have to follow compliance policies in their true spirit. Telcos’ businesses are not hard on compliance, so they don’t care much about compliance and regulations. Compliance and regulation adherence is one of the reasons banks will never be successful until they revise their compliance strategy according to market demands; otherwise, they will be struggling. Fintech is transforming technology, the financial industry, and people’s lives, but marketing is another challenge faced by most FinTech companies, as they are often outspent by larger rivals.

FinTech is a desirable vision as it facilitates the provision of financial services to low-income groups and informal sectors at a reasonable price, unlike financial exclusion, where these services are either not accessible or too expensive. Banks are venturing into the world of daily or transactional banking by providing a host of digital tools and services that aim to boost the engagement of MSMEs on a daily basis.

In order to access this attractive opportunity, it is imperative that the registration process be efficient, streamlined, and user-friendly. Credit assessments should be completed in a matter of minutes rather than taking several days. It is crucial for clients to carry out their tasks with utmost efficiency and productivity.

Question is – “Is it possible to separate banking from banks?”, It’s like pulling blood out of a living body.

The answer is known, and it brings sadness for some and happiness for others. Yes, it’s happening already.

A fintech company’s reputation can be severely impacted by even a minor data breach. Perhaps it is an embrace of FinTech by banks, or perhaps there is an ulterior motive. It seems that we must all remain patient and observe the developments in this area. Someone, perhaps a payment research manager or innovator, once expressed that Apple disregards the opinions of banks. What benefits do banks have that would encourage them to take part? The time of Apple Pay’s inception.

Points to Note:

All credits, if any, remain with the original contributor only. We have covered all the basics around mobile payment security and the importance of mobile payment data. In the next upcoming post, we will talk about implementation, usage, and practice experience for markets.

Books + Other readings Referred

  • Research through the open internet, news portals, white papers, notes made at knowledge sharing sessions, and live conferences and lectures
  • Lab and hands-on experience of  @AILabPage (Self-taught learners group) members.

Feedback & Further Question

Do you have any questions about AI, machine learning, data billing and charging, data science, or big data analytics? Leave a question in the comment section or ask via email. I will try my best to answer it.


Conclusion – The FinTech sector encounters challenges in persuading regulators and frequently experiences substantial regulatory setbacks, as there is no government agency specifically dedicated to supporting them. The protection of private financial information belonging to consumers and corporations is a significant concern for regulatory bodies due to the possibility of security breaches and cyberattacks.

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Posted by V Sharma

A Technology Specialist boasting 22+ years of exposure to Fintech, Insuretech, and Investtech with proficiency in Data Science, Advanced Analytics, AI (Machine Learning, Neural Networks, Deep Learning), and Blockchain (Trust Assessment, Tokenization, Digital Assets). Demonstrated effectiveness in Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Payments), IT Service Management, Software Engineering, and Mobile Telecom (Mobile Data, Billing, Prepaid Charging Services). Proven success in launching start-ups and new business units - domestically and internationally - with hands-on exposure to engineering and business strategy. "A fervent Physics enthusiast with a self-proclaimed avocation for photography" in my spare time.

One Comment

  1. Charanjit Singh at

    Very Nice Article sir. Great job!!


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