Market shares of traditional banks have continued to fall even further behind largely due to the global coronavirus pandemic as the use of financial apps is up by 72 percent since mid-March.
According to Nigel Green, the Founder and Chief Executive of deVere Group, one of the world’s largest independent financial advisory organisations, the pandemic has accelerated those trends that were already shaping business such as greater inclusion of tech into our everyday lives.
“Coronavirus has ushered in a new world, with digitalisation and new technologies fuelling the changes. This can be seen by demand soaring for video-calling platforms such as Google Hangouts, Skype, FaceTime and Zoom amongst others, as more people than ever work remotely. It’s also underscored by the increasing use of fintech apps which allow users immediate, on-the-go, 24/7 access to, use, and management of their money,” he said.
He argues that there’s a historical precedent for what’s happening now as banks and other traditional financial services providers were, in most cases, spectacularly caught off guard by the 2008-2009 financial crash.
According to Nigel, during the 2008-2009 financial crash, new customer expectations, business and tech developments were way down the to-do list of banks, as they found their way into a new world with a new regulatory landscape.
He noted that agile, tech-driven challenger banks and fintech firms swooped in to fill the void left between what traditional financial services companies, especially the traditional banks, were offering and what customers were expecting, especially in terms of customer experience.”
“The fintech firms, which offer mobile banking, savings and investment apps, and peer-to-peer lending, amongst other services, now have a decade of development, experience and expertise over many traditional banks,” he added.
As even more people are now embracing fintech due to Covid-19-triggered social distancing, isolation and lockdowns, and as the apps are growing in popularity due to their convenience, increased security, and as people become ever-more tech-savvy, it’s likely that ‘bricks and mortar’ banks will fall even further behind in market share and customer experience.
Coronavirus is going to further disrupt the wider banking sector. It will act as another catalyst for people to seek fintech alternatives to access, manage, use, save and invest their money across the world.