There is no doubt that there is a considerable shift in how humans think of courtesy of technology. The world has been reduced to a global village, thanks to globalization. With this, comes an immense challenge for a business to thrive. Organizations are taking up new modes of operations, including a celebrated model, the learner operating to optimize profits and retain their competitive edge in the market.
An increase in the penetration of nascent technologies in the financial space has resulted in significant disruption. This disruption is revolutionizing finance for businesses and consumers.
Technology is leading the world to a new order where businesses, nations, and people communicate and operate. This technological progress has facilitated immediacy, accuracy, and efficiency in Fintech, and banking services, on a global scale. There is also a big expectation in customer experience and low delays and margin of error.
Even though many fintech companies boast of being superior to banks, conventional banks continue to play a big role in moving credit on behalf of all new businesses. In essence, a lot of fintech companies depend so much on traditional banks. Therefore, the change witnessed in finance is more a behavioural change facilitated by consumer experience and technology. The crucial work of moving money has been reserved for traditional banks.
The entire finance industry has to distinguish the fundamental difference between money transfer and making a payment. Companies like ApplePay are money transfers operating using a simple principle. Payment, on the other hand, involves important transactions like salary. Payments are sensitive to time and reliability of delivery.
BACS is a UK based payment system that is very efficient. The company processes trillions daily. Nonetheless, these vast amounts remain in the remitter’s accounts in the bank, until it is credited to the recipient’s account.
Companies that provide global services experience difficulties as a result of a difference in time zones. They also face a challenge with the banking infrastructure in a particular country.
By and large, the future of global payment depends so much on behavioural change of users. A lot needs to be done to improve service delivery. However, no matter how fintech startups work towards increasing efficiency, traditional banks will still be relevant in the foreseeable future.