The way customers identify themselves to access financial services is changing. Has there been a Fintech Effect on digital identity?
Without legacy systems to delay the implementation of new technologies, fintech challengers and neo-banks have been able to offer powerful ways to authenticate customers. Traditional banks meanwhile, have shown greater caution in adopting digital identity at scale.
As Manuela Sedvartaite, Innovation Manager at Santander, explains, “We understand the operational efficiencies and lower costs digital brings, we think about the customer first and understand that for them it’s a better experience. But we can’t always make it work. Sometimes new systems cannot be relied on, which is a serious risk from a compliance perspective.”
Now more than ever, customers expect seamless experiences when dealing with their bank. Russ Cohn, General Manager, International at OCR Labs highlights, “Banks understand the ‘Amazon effect’ on user experience, which has created very high customer expectations.” And with no sign that consumers expectations for convenience and connectivity will slow down anytime soon, traditional banks have no choice but to adapt.
But if digital identity is to be adopted across the financial sector, then could it be collaboration is the key ingredient? Felipe Martinez, CIO at Revolut notes that as a Fintechs they are seen to be the fast-moving drivers of digital-first financial services, while traditional banks are portrayed as the opposite. Felipe argues that in fact, “The best results come from collaboration.”
He explains, “Traditional banks have legacy processes, systems, and mindsets but they also have a lot of wisdom, data and the value of their vast experiences and millions of customers and transactions. Banks partnered with fintechs, and with regulators shaping the rules is what will drive progress.”
Watch ‘The Fintech Effect’ panel discussion in full below.
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