Fintech, Mobile Banking and the Changing Dynamic Turning the Finance Industry on Its Head

Fintech, Mobile Banking and the Changing Dynamic Turning the Finance Industry on Its Head

Once upon a time, financial transactions took place in banks. Whether you wanted to open a savings account or invest in the stock market, the decisions were largely made in a facility with trained financial experts to help consumers manage their assets and investments. For customers, this meant that most interactions were face-to-face. You had a personal banker or a money manager who could look at your specific set of circumstances and help you make decisions based on their wealth of advanced knowledge about current finances. But it also had a drawback — time. It’s time-consuming to set appointments to see people about your finances. And it’s really only necessary for specific things. Today’s consumers are educated. They want to make decisions about their own investments. They want to have real-time access to their portfolio.

Fintech — the Potential Answer to the Internet Age in Finance

Just like every other industry, finance has seen major booms with the advent of technology. As society evolves toward instant user access, finance is keeping pace with new answers in mobile banking. Companies like Varo are offering consumers a mobile banking option. With this startup, customers can manage all of their financial needs through a secure mobile app. Varo customer might use a digital financial coach to help them manage the whole picture or just to take care of day-to-day matters.

For traditional banks, there’s a growing unease in the changes that these new startups offer to consumers. Startups such as Varo center on the customer’s ability to manage all of their finances, from debit card purchases to financial management, right from their phone. The app is designed to be intuitive; consumers can count on personalized services that help them take control of their own financial management and grow their own wealth. In traditional banking, there’s a growing need to upgrade their own technologies so that consumers have the widest range of services.

Consumer’s Changing Needs

For consumers, Fintech offers the ability to stay in control of every area of your finances. It offers an app where you can easily access all of your accounts at any given time. Here are some key differences between traditional banking models and the new digital-only banking models:

  • Rates and Fees. Bricks-and-mortar banks offer all of the same services that online banks offer, but the rates and fees can be different. Because there’s limited overhead in an online app, rates might be higher in online banking. Often, fees are much lower as well. For the frugal consumer, online apps can offer a substantial savings in these areas.
  • Personal Financial Management. There is a striking difference between these two models. The preference will largely depend on the consumer. In traditional banks, a personal financial manager can talk consumers through their own specific needs. This expert can recommend the best accounts and investments. He or she can be available to discuss the client’s need in person or via phone or email. Traditional banks are also offering apps that include intuitive financial management assistance. So clients who don’t wish to speak to a person can use this financial management tool to complete their banking. With a mobile-only bank, financial management tools are available but no actual financial manager to walk clients through their banking. For some clients, the online banking model will work much better because they don’t need to speak with an advisor and prefer to make decisions on their own. For some, though, the option to have expert guidance from an actual person is still a major benefit.

Changes to the Financial Sector

For consumers, it’s easy to see why mobile applications would be so advantageous. They offer an easy and secure way to access your finances without slowing down the rest of your schedule. They’re exceptionally convenient for anyone who’s comfortable making the bulk of their financial decisions without any expert guidance. For those who work in finance, a great deal of change will occur in the way that companies do business as these banking models evolve. Online banking may take the lead in areas that traditional banks once dominated, such as wealth management, stock and market exchange management, and insurance.

Technology has impacted virtually every walk of life. In finance, information and transactions are available at a high rate of speed. There will be changes in the way consumers want to access their information, and there will be a need to stay on top of the latest regulations regarding finance and technology. There are also unknown variables, such as the way that block chain and bitcoin technologies might change the financial landscape.

What is certain is that the financial institutions that rise to the top in this new dynamic will be the ones that correctly predict consumer needs and excel in using technology to their advantage.*

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