It seems the banks aren’t bothered at all by the Fintech bubble
This month alone, I have physically gone to my two banks more than ten times to perform some sort of transaction. You would actually think that I spared 2–3 hours of my busy working day to do serious tasks at the bank. But you will surprised. I mainly went to ask for my monthly bank statement, renew my ATM card, make deposits or withdraw some money to pay bills.
And it’s 2016!
My journey to the bank is often a difficult one. It’s met with lots of hesitation and questions about whether what am doing is absolutely necessary. The other day, my internet banking credentials couldn’t work, so I called my bank. The customer care lady politely asked me to physically go to the bank just to get my new login details. Sigh. And then just last week, I noticed my debit card was expiring in about two weeks. Knowing how important this card, I called by bank. Again I was asked to get to the bank, fill in a renewal form and then wait till the end of the month before I could be issued a new card. In my head I have lots of unanswered questions buzzing.
Why Why Why? Why are you doing this to me?
Traditional Banks are so deep slumber, you would think they are medically sedated. In 2016 where I have an internet-connected smartphone with me everywhere I go, why do I have to find time in my busy schedule to get to the bank just to fill in a form? To reset a password? To deposit money?Unfortunately I have failed to get answers to these questions from my bank. Usually am told it’s standard procedure which often leaves me very frustrated with my bankers.
Enter Fintech.
Fintech an intersection of Finance and Technology is currently the hottest trends in the tech industry mostly in Africa. As we speak there are more than 200 Fintech startups across the continent this year alone. This figure is astronomical compared to other sectors such as Agriculture, e-commerce, media, software etc. And mainly for a good reason. Fintech startups see the frustrations that millions of banked and unbanked populace have to endure because of outdated, slow and broken banking systems. Users like me are desperate for a more convenient, faster and cheaper banking system than what’s currently available in the market.
At the forefront of this bubble are mobile telecoms with their innovative mobile money platforms. Mobile money has saved me lots of time and effort while making transactions. When I need to pay my electricity bill or send money to my people at home, I unquestionably use mobile money solution. There are quite a number these days — from Telecom mobile money platform, to web and mobile apps. The convenient I get leaves me with no reason whatsoever to use my bank.
Banks have taken notice of threat that Fintech poses to their core business. A handful of banks have integrated their platforms with mobile money platform. For instance Centenary bank customers can withdraw money from their bank account directly to the mobile wallets and vice versa. Others like Barclays have opted to roll out their own “mobile money” clone systems. With Barclays for instance, you can send money to anyone with a mobile phone and that’s irrespective of whether they have a bank account or not. Others have completely chosen to look the other way — my bank inclusive.
So if Fintech companies are offering better banking solutions, the question then is; why are people like me still keeping our money in the bank? I have been thinking about this question lately. Am still not exactly sure but the answer lies somewhere between having to stick with legacy system (inertia) and adopting something completely new.
Banks have been around for hundreds of years and as a result have won trust of their clients. There are mature regulations that govern banks and therefore safeguard users from things like fraud. In other words my money is (mostly) safe in the bank. This trust the banks offer outweighs all the shortcomings associated with them.
The other reason I can think of is we are still mostly in cash-based economy. There’s lots of paperwork and solid cash moving around. Fintech companies need money to be in digital form to perform any sort of transactions whereas banks are good with cash. In fact banks work best with cash and probably want it to stay that way because they benefit from transnational charges. For instance banks charge every time you withdraw solid cash from the ATM or counter or deposit it.
Lastly am still using my bank because everyone else is still using banks. My employer deposits my salary in bank account not on Mobile money. If I have to pay for some arbitrary government service say Passport processing, am told to bank the money in a particular bank account. I have to go the bank, make those long lines and make that deposit or else I won’t get my passport. Until ministry of internal affairs gives me the option of sending money to a particular mobile money number, am completely stuck with the banking system.
However, in two years, I plan to move at least 60% of my money from the bank to a Fintech company. In 2018, my time will be too precious to waste behind a long queue in a bank. In 5 years I will have to have a strong reason to step in a banking hall — that’s if I will be having my money there.
