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Jan 10, 2022

FinTech banks: companies that are gaining competitive edge thanks to 100% digital process management

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FinTech banks: companies that are gaining competitive edge thanks to 100% digital process management

WHAT IS FINTECH BANKING AND WHAT ARE THE ADVANTAGES OF FINTECH BANK COMPANIES? 

To answer the question of ‘What is FinTech banking?’ we need to start by defining the word FinTech itself. The word FinTech is formed by a combination of two different words: finance and technology. Therefore, we can say that FinTech banking or FinTech banks are those that operate using new technologies and whose activity is 100% digital.

Within this type of digital banking activity called FinTech banking or FinTech banks, two types of players can be distinguished: the “challenger banks” and the “neo banks“. 

It should be noted that challenger banks are only licensed to manage electronic money (EDEs) and are therefore can’t be considered banks (at least for now) in the typical sense of the word. However, neo banks not only can manage electronic money but are also licensed to handle physical money. Therefore, neo banks, such as Imagin Bank, are indeed considered proper banks or FinTech bank companies.

These types of FinTech banks represent the future of FinTech and digital banking companies, both internationally and at the national level since they are highly innovative.

FinTech banks are companies that rely on state-of-the-art technologies to improve user experience and customer service.  FinTech banking services are 100% online and much more extensive vs traditional banking thanks to their digitised processes. Therefore, in FinTech banking commercial offices are only an option, but not necessary whatsoever. This allows FinTech bank companies to cut costs significantly and to conduct their business much more efficiently, quickly, and substantially more conveniently for their customers.

Another advantage of FinTech banking is its improved customer experience offer. They focus on implementing processes that allow customers to enjoy simple, smooth, and fast account opening, management, and transfers remotely from any device.

Likewise, going through a Customer Onboarding process or opening an online account with a FinTech bank or through digital banking also becomes very easy, 100% digital, and, in almost all cases, without cost for the customer. Users can have their new account up and running in just a few minutes and a few intuitive and quick steps. 

WHAT MAKES FINTECH AND DIGITAL BANKING DIFFERENT?

The difference between FinTech and digital banking lies in their digitisation reach.

On the one hand, although digital banks operate 100% online, they are still backed by a traditional bank firm with physical branches. This allows customers to withdraw cash from the bank’s ATMs or partner banks, which gives users greater confidence.

In contrast, FinTech banks or Fintech companies function as a whole and don’t offer face-to-face customer service in commercial branches. This cuts all infrastructure costs which allows them to offer much more attractive conditions for customers, without commissions and with more benefits. 

Undoubtedly, FinTech banking has taken a major role due to the Covid19 outbreak. In recent years, the pandemic has prompted customers to open digital accounts significantly more than ever before due to its perks. Digital accounts can be managed remotely from any device and allow contactless and NFC payments from anywhere. This was exactly what the customers were in quest of.  

WHAT IS IN THE PIPELINE FOR FINTECH AND BANKS?

The future of FinTech vs banks will continue to tip in favour of the former.

Users are keeping up with digitalisation and demand the same from their banks. More and more, customers are increasingly looking to manage their accounts, their savings, and carry out transactions completely online and without any waiting or middlemen involved. They demand services supported by innovative technology that guarantees fast, simple, and compliant processes for all their transactions.

The only compliant answer to these demands is the Qualified Electronic Signature:  universal, accessible from any device and channel, at any time, and compliant with the highest eIDAS and AML standards. Queues, commissions, paperwork, and small print are long gone in FinTech banking.

Request a free demo of the Qualified Electronic Signature here and discover all the advantages of digital onboarding.

Faced with this unstoppable rise of FinTech vs traditional banking, traditional banks will have to choose how to hold on to their leading position in the financial market.  Some traditional banks have adapted by buying out FinTech companies. But most of them are opting for reinventing themselves from the roots through the implementation of digital and automatic technology.

Digital solutions such as the Qualified Electronic Signature enable banks that implement it to take advantage of digitalisation also in the long term. Basing their KYC processes on innovative technologies will allow them to keep offering their current services 100% online in a much more efficient way (even the ones that require the highest level of legal soundness). This also gives them the opportunity to offer services that most companies are not equipped for, such as buying and selling of cryptocurrencies.

FINTECH VS TRADITIONAL BANKING 

FinTech companies offer better advantages vs traditional banking. While traditional banking involves a series of conditions, such as fees for managing loans, applying for mortgages, and all kinds of procedures that can only be handled in person, FinTech banking doesn’t.

Those benefits that come only from FinTech banking are just some of the many other users are looking for in the search for more open and remote banking. Therefore, users are choosing FinTech banks, companies that allow them to operate fully remotely without opening or maintenance fees.

For this reason, FinTech bank companies are positioning themselves as the best alternative for digital banking, both “Challenger Banks” and “Neobanks”, as they are an innovative type of banking that’s up to date and focus primarily on meeting the new digitalised users’ needs.

To name one example, it is cheaper and more profitable to operate with FinTech banks for making international transfers from abroad or to shop online in countries with a different currency paying less or even no fees at all, providing greater convenience and time savings to the user.

ELECTRONIC IDENTIFICATION LAUNCHES THE SOLUTION TO BOOST DIGITAL BANKING AND FINTECH BANKS

Electronic IDentification is a pioneer eTrust Service Provider company in the design and development of innovative end-to-end electronic identification solutions AML5 and eIDAS compliant throughout Europe. Thanks to its disruptive asynchronous video identification technology Electronic Identification is an authorised certificate authority, therefore it is qualified to issue qualified electronic certificates.

All this makes Electronic Identification able to provide FinTech banks with the most innovative technology to make processes more secure, competitive, and reliable.

FinTech and digital banking face money laundering and phishing fraud in digital onboarding processes. This makes it vital for companies to implement secure and unbreakable identification processes such as Electronic IDentification’s video identification technology which allows companies to perform digital identification that is 100% Europe compliant, fast, fluid, and accessible.

On the one hand, this technology complies with the regulators AML5, eIDAS, and RGPD.

What’s more, Electronic IDentification’s video identification technology does not require human intervention which allows it to be carried out in seconds, and to issue a legal and 100% secure qualified certificate almost immediately. This allows the user to access their digital banking services or open an account in your FinTech bank with maximum security.

On the other hand, Electronic IDentification also developed the most competitive, customisable, and favourite solution of all FinTech bank companies and banks in Europe: HelloID, the fastest digital onboarding service. A customisable chatbot with an adaptable look&feel and easy to integrate in hours that allows FinTech banks to create, develop and deploy any onboarding process very smoothly in hours and to access and convert more than 500 million customers across Europe.

Click here and discover our HelloID chatbot with which you can create any digital onboarding process in a matter of hours.

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