Finding a future with Fintech:

1- Fintech: is a combination of financial technologies, used to describe the field of

new technologies and innovative solutions, made by stat-ups, that seeks to
improve the use of financial operations and services for companies, business
owners and consumers.
First significant fintech wave started in 2005, with the creation of TextPayMe, a
company that provides an Sms payment service allowing users send money to
others using text messages. Then the expanding evolution of mobile technology
and the crash of the financial markets caused the emergence of financial
technologies. Between 2013 and 2015, the number of fintech start-ups doubled
and fintech became the trendiest idea in Silicon Valley. In the 2015, the
widespread frustration with big banks made the demand for upstart’s services
strong amplified by low rates making raw material for many money-related
startups cheaper. Plus, the world is way more connected, cheap storage and
computing, making people more comfortable managing their business and
money online.

2- Costa shares four options with her client:

a) Do nothing:
First and simplest option is to continue with her client’s current business model
with little changes.
Some of her research have shown that branches were a key presence and
necessity for attracting new clients and wanted to keep branches open. The key
is to make these branches more attractive, advisory focused and lounge-like.
Making clients more comfortable, meetings more attractive and having a good
relationship with the clients.
Pros: simplest decision, costing less.
Cons: research showed that 95% of its clients’ transactions are not made through
a branch. Not evolving like other companies, old school.

b) Acquire fintech firms:

Some other of her research revealed that consumer experience was evolving,
and banks need to become more technology driven. So, her client must acquire fintech
companies to better serve his customers. The human capital that technology companies
had to offer leaded her to this option.
Pros: evolving, attracting more customers, better service for clients, human
capital
Cons: High cost, lots of concurrence, difficulties to acquire fintech firms

c) Convert current IT and strategy to become a fintech company

 Banks could overhaul their infrastructures and become fintech or technology
companies. That implies employing more engineers and programmers and a lot of
financial resources to invest heavily in IT.
Pros: fintech company’s field is the most attractive, will attract more customers, better
customer service
Cons: cost a lot, a lot of investment and more daunting task

d) Partner with fintech companies to serve customers:

Creating an ecosystem of fintech for customers.
Pros: existing fintech companies has more experience in the field, you don’t have to
manage the entire customer experience.
Best customer service
Focuse on each partner’s competitive advantages.
Cons: need to know which products and customer segments were currently being
served and which were underserved.

She should recommend them the fourth option: Partner with fintech companies to serve
customers
Creating an ecosystem of fintech will allow the bank to focuse on each partner’s
competitive advantages. Making the most of each advantage, the bank will therefore
choose the best partner for each service, which will enable her to be the first in her
field. Also, this option will allow the bank to focus on her main activity and make the
best of it. The bank won’t have to overhaul their infrastructures, employ engineers and
programmers and nor to pay large amounts in IT investment. However, the client must
be careful and choose wisely the partners.