Banks.am presents excerpts from the op-ed by former head of “Sfera” Bank, Curator of SME Business at Bank Vostochniy Nikolay Petelin. The op-ed was originally published on the Frank Media website.

As a banker, I am mainly interested in the means of communication between the person and the world via money. The new era of fintech, the demolition of traditional banking system, the death of banks – these are regular headlines in financial media and the reports of leading global consulting agencies. But what is really going on?

How the client is changing

Let’s start from the most important. Who are they, the modern clients? What do they want? They are tired from the volume of information they consume every second. At the same time, they want to influence the world – consume only the content they want or create such content, support ecological initiatives, invest in new types of currency, or just make investments.

Fintech projects with a human face

Hundreds of fintech projects worldwide are ready to satisfy any needs: save money and invest it correctly, make payments and transfer money to other countries, buy currency and capitalize on the securities market.

There are projects that illustrate this trend in the best way, for instance, Gugu.ai. It is an AI bot that helps (in game format) the user to optimize their expenses and set their financial goals correctly.

First of all, I like it that the project is made in Africa. We are used to thinking that fintech means Europe, USA, Singapore and China, but technologies have gone far beyond these countries.

Another good example is Emma, the app for finance management, which calls itself the client’s “best friend in finance”. The app helps users to stop at the right time (stop spending money if there next paycheck isn’t close) and even suspends your subscriptions.

These projects with a “human face”, which do not aim to pump out money, are helping the users learn to control their financial flows. They teach the users and create real values for them.

Not-banks

Another, no less interesting tendency is that IT giants, which hold colossal volumes of data on consumer behavior, have put this knowledge to use and switched to banking (Google’s Cache, the launch of Apple credit card, Facebook Pay, Alipay) – a new kind of banking, which users don’t even notice.

For instance, all Apple users are known to be loyal to the brand. By using the devices and the only ecosystem they trust, which is consumer-oriented, Apple users easily took on the financial services that the brand decided to offer.

Anyone who actively uses Facebook (Instagram and WhatsApp) has been ready for staying with apps and making payments and transfers via them.

In fact, IT companies have turned into “not-banks” that provide banking services, seamlessly “installing themselves” into the users’ lives.

Small fintech startups, which cover one or several local needs of the client, have also transformed into “not-banks”. For instance, U.S.-based Tala, which provides small loans to people without credit record and bank account, based on their digital footprint.

The future is closer than you think

Banking for business is changing too: clients are perplexed, because as natural persons they are bombarded with special offers and bonuses, but after becoming a corporate client, they see outdated policies and services.

Following the old custom, banks are trying to divide the client into a natural person and a business (which is particularly strange in case of small businesses). I am certain that the first bank which fully adheres to the business2human policy and stops making that division, enabling the clients to switch quickly between accounts, will simply blow up the market.

The world will never be the same. Changes occur at a crazy speed, but many enterprises are keeping up, creating new services every day and gaining millions of clients in record short period of time.

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