The banking and fintech industries have undergone a number of transformations in the past few years. With the Covid-19 pandemic affecting all corners of the world, both positively and negatively, the changes that banks, financial institutions, and fintech companies have experienced has been accelerated.
Dr. Edwin Ver Ouderaa is a Senior MD and the Lead of the Financial Services Digital Practice and Analytics at Accenture. Dr. Edwin has spent over 2 decades with Accenture, working in a number of different roles related to Financial Services. Prior to joining Accenture, Dr.Edwin founded his own technology startup, VdO Connectivity, a company that primarily focused on Client Server Technology, which he sold in 1995.
Accenture is an international professional services company that provides its clients with Strategy and Consulting services, Interactive (digital marketing/analytics) services, Technology services, and Operations services. Overall, the company helps its clients to improve their business performance and become more efficient and effective in their processes.
Dr. Edwin says during his talk that due to the number of FinTech companies that have been started and grown over the years since 2010, the amount of innovation that the industry has seen has been phenomenal. The changes that FinTech companies have brought to the financial industry as a whole has already been impressive and will continue to be. Additionally, the growth of the FinTech industry has also put pressure on and forced the banking sector to change itself and to innovate their processes and operations as well. Dr. Edwin states that “when a (bank) CEO asks me what their strategy should be, I say; well you should be a FinTech bank. Now, you should not think of yourself as a classic old bank, but you should think like a FinTech. Then you can benefit from your client base and from your experience from the past”.
Dr. Edwin states that despite the Covid-19 pandemic, “there are still tonnes of deals being done (with FinTechs) and there are also lots of companies going for IPOs”. He believes that the FinTech industry is not stopping because of Covid and saying that the continuation of the industry and the growth of these companies is “natural” due to the fact that Covid has forced everyone (consumers and companies) to go digital, and these Fintech companies are mostly already digital meaning that they are benefiting from the shift.
At Accenture, Dr.Edwin’s team comes together annually to discuss what they believe will be the trends for the upcoming years based on the trends that they have seen in the current and previous years. According to Dr.Edwin, the trends that the industry is currently experiencing are the trends that they had expected to take shape around the year 2025, meaning that the Covid-19 pandemic has actually fast forwarded the trends in the world and accelerated the adoption of these trends at a speed that Dr.Edwin describes as ‘warp speed’.
As a result of trends being accelerated, Dr.Edwin is confident that the world we live in is becoming a world which is digital by default which, in his words is a world whereby “any company in the world, big or small, in its strategy in how it wasnt to build itself, grow, or change will first make everything 100% digital, making every business an ecommerce business”. With these changes, as businesses transform into ecommerce businesses of some form, banks and fintechs will need to be there to support these new ecommerce transformations.
Dr.Edwin compares the lockdown periods to an unplanned, unscheduled user acceptance test of all the digital experiences of all companies and all governments in the world. As a result, we have seen a number of companies struggle and stumble, and at the same time we have seen others who performed incredibly well and grew during these times. The companies that performed well in this ‘test’ are the ones who have managed to undergo end-to-end digital transformation, from the first stage of the business process to the delivery of their product or service.
Overall, the Covid-19 pandemic has brought along a wave of accelerated digital transformation in both the banking and fintech industries as well as in the majority of other industries. With the amount of competition that exists currently, companies will have to ensure that they are providing the best experience possible for their customers and consumers so that they are able to attract new business and retain the current.