Technology driving the new wave of banking

afr.com:

The banking sector is undergoing revolutionary change. The number of banks is growing, buoyed by the emergence of neobanks, and the sector faces increased competition as non-banking institutions are offering banking services such as mortgages and credit cards.

A recent report from McKinsey reveals that retail banking margins have fallen by a quarter over the past 15 years, with a further 30 per cent fall expected over the next decade.

Customers increasingly want convenient, personalised banking. 

“While traditional banks have been convenient one-stop shops, many haven’t evolved their products in a way that matches the tech-driven pace of change in other industries,” McKinsey notes.

This has created new opportunities in the finance industry for fintech companies. In many cases, fintechs look for a niche where they feel they can create a profitable business, either by churning customers away from traditional banks or by providing services to banks. They use new technologies and tools that can adapt to customer needs faster than legacy banking platforms.

“You’re only as good as your slowest moving part.”

— Andrew Laycock, chief executive and founder, Shaype

With around 30,000 banks operating globally, there is substantial competition for customers and for resources to develop and deploy systems that enable them to offer new and innovative products and services.

Both new entrants and incumbents seeking to boost their product offerings must embrace new technology so they can meet the changing needs of customers – before others do.

Andrew Laycock, the chief executive and founder of Shaype, saw how the banking industry was transforming and identified an opportunity to develop a platform that could support non-banking