When you hear stats like ‘90% of existing data was created in the last 2 years’ it’s easy to understand why businesses are taking advantage, creating personalised experiences for customers. There is so much data at a business’s fingertips that can be used to help craft a better and closer experience for your customers. It also means due to the volume of data generated every day by the individual means that customer insights have the potential to be their most sophisticated ever. With data-driven fintechs leading the way.
Fintechs are getting the edge over traditional financial institutions by using incredible amounts of data to generate customer-focused marketing campaigns.
The major advantage of Fintech is the agility to react to real-time data. Think of established banks as warships and Fintechs as speedboats. The banks may have near infinite resources and presence, but Fintechs can adapt course at a moment’s notice. The huge datasets on offer allow Fintechs to create meaningful interpretations of their customer’s behaviour. Your voice, videos, text messages, GPS data, and more can all be used to create an accurate financial avatar for every customer.
Using the available data, Fintechs can understand your potential risk, gender, age, wealth, location, and relationships to tailor services in what can feel like an instant. With this customer-oriented approach, Fintechs can approach you in the same way retail has done for years. Knowing what you’re likely to want and when you might want it.
So I ask, will this cause a mass transition from traditional financial services to Fintechs?
There are parts of the market that benefit from the accessibility of Fintechs. People that were traditionally ignored by big banks because they may have been unable to apply for a mortgage, can now register with a challenger bank within minutes using their phone. However, it’s still relatively early days for Fintech when we consider how long traditional finance has existed. Privacy and security are two major advantages that the big banks have over Fintechs, or at least, that is still the perception for many.
What has been the market’s reaction?
Growth is either explosive or very still for Fintechs usually, as they’re reactionary to the economy. If interest rates are low, lending is up, and vice versa. From my experience speaking with top data & analytics talent in this area, Fintechs tend to be the more attractive option when compared to the traditional financial space. Fintechs often work with modern tech stacks and can be swift in adopting new tech, when compared with older fin-serv that still work with a lot of legacy systems. In my experience, it would seem Fintechs also have more opportunities to work with emerging AI & create ML models. I think it can also be said that people within these agile organizations tend to have more autonomy and can see the impact their work has on the business and the market given the size of the average Fintech is much smaller than traditional Finserv.
It’s important to note that there’s an element of risk with Fintech usually not as present in more established organizations. Most Fintechs are young, so there’s a lot riding on the success of the first few years; some people see that as an exciting challenge and a worthy caveat to working with the brightest minds and newest tech.
This is a really interesting space, and I am enjoying watching it evolve. If you’re a D&A professional interested in the Fintech space, or you need help building a team, please do get in touch!
Ethan Simpkin
Ethan is a highly skilled consultant with us here at Orbition, specializing in data and analytics.
With a passion for technology and a natural talent for identifying top talent, he has become a valuable asset to both clients and candidates in the industry. Read more.
