Digitalization changes the rules of the game in each sector and companies that don't take that into account will lose out sooner rather than later. That also applies to the financial sector. The rise of fintech companies, technology startups that focus on simplified solutions for a service in the financial sector, has revealed a new reality to banks. For insight on this we went to Bart-Jan Engelen, Sales Coach & Trainer with ING Wholesale Banking as well as the founder of Valuefinders.net, an online platform that ING and Realdolmen have developed together. It was a fascinating conversation about the changes in the financial sector – and how you can respond to them, naturally.
Fintech companies force the banks' hands
Fintech companies? No one had heard of them until two years ago. Yet today they shoot up out of the ground like mushrooms. How did we achieve this outcome? Simple: they make use of the newest digital technologies to design highly innovative services or make existing services much simpler. Think of Kickstarter for example, a specialist in setting up crowdfunding. They ensure that projects can be financed by third parties, which means innovators no longer have to go knocking on a bank's door. Another success story is TransferWise. With TransferWise you can transfer money abroad without having to pay high fees. Here, too, banks are being pushed out of the game.
Innovation is the keyword
"The fast rise of fintech companies is simple to explain," says Bart-Jan Engelen. "It's about the culture that these companies value. Each of them is a company that bets on digital innovation, and not only a focus on efficiency. Twenty years ago, working at a bank was popular. Less so now. More and more graduates and even top bankers get started in fintech companies or are starting their own. Why? Because digital innovation speaks to the imagination. It's innovative, and that appeals to open-minded people."
"Banks realize that they too have to innovate. They can do so by taking over fintech companies, but these have risen sharply in market value and are expensive as a result. That's why more and more partnerships are being secured." That's a win-win situation for both parties. Banks gain innovation, while the fintech companies can profit from the wide network of client relationships that banks possess. ING Wholesale Banking has also established the ING Accelerator program (supported by PACE). In this way ING gives internal innovation initiatives the chance to effectively put their ideas into practice. At the moment there are two startups that are already in a test phase. And this is how the gap between two financial worlds is gradually bridged.