| Pub. Date | : Nov, 2020 |
|---|---|
| Product Name | : The IUP Journal of Bank Management |
| Product Type | : Article |
| Product Code | : IJIT11120 |
| Author Name | :Abdul Quddus |
| Availability | : YES |
| Subject/Domain | : Finance |
| Download Format | : PDF Format |
| No. of Pages | : 14 |
Technology-driven financial services transaction is profoundly changing the nature of banking. The developments in various domains like payments, lending, credit assessments, etc. are being driven by the ability to extract and process vast amount of data and predominantly by firms outside the finance industry. Financial Technology is a rapidly growing industry, with significant investments and research being undertaken. In fact, SSRN (Social Sciences Research Network) reports that FinTech-related research is now the fastest growing research topic (David, 2018). Traditionally, banks have neither been pioneers nor at the forefront of driving technological innovations in financial services and products. Incumbents, including banks and other firms in financial services sector, are paying close attention to the FinTech space not only to implement some of the emerging technologies to improve their services but also to determine competitor threats to their ongoing business strategies. The purpose of this paper is to draw the attention of banks' executives and technology officers to the current gaps in banking technology infrastructure and the urgency warranted to incorporate emerging financial technologies to drive business strategy.
Major banks have weathered many storms and have strongly held their market share for decades. The advent of technology-driven firms is set to reshape the financial sector landscape and the way banking services are delivered. The emergence of technological innovations has substantially lowered the entry barriers for new firms. Large technology giants, that currently collect massive volumes of customer data, possess enormous potential to compete with the incumbents in offering customer-centric financial products. Banking services over the last decade have evolved through technology; however, in the current environment, the nature of competition and threat of disruption from firms outside the industry is unprecedented.
Technology firms have thus far collaborated with banks to fill certain gaps to enhance customer services. These firms have gradually become part of the ecosystem and may perhaps challenge the incumbent banks for the market share. It is no longer a matter of if or when technology firms will change the landscape. The competition is already here. Digital banks