European corporate banking together with other financial institutions of the continent are now undergoing a significant change which will affect the future of banking. The banking world faces unforeseen challenges as it tries to hold on to customers who are being tempted to try alternative banking solutions by Fintech companies; finance start-ups and large technical corporations. These banking alternatives are attracting customer attention with lucrative proposals as they infiltrate the banking world which has up to now been the exclusive territory of conventional, traditional banking.
The Challenges Confronting Traditional Banking
If traditional banks want to provide clients with complete solutions they will need to modify their modus operandi and invest heavily in new technology to update their systems and integrate them in the digital world we live in today. If traditional banks succeed in doing this they will be able to deliver consecutively high quality services, liquidity management and reports to their clients. One of the most important elements of the necessary surge into the future facing traditional banks will be investing in security. Faced with clients who are aware of all the alternative banking options available traditional banks will have to reduce land-based operations to move to newer platforms including the Internet and mobile apps.
The Effect of the Evolving World of Technology on Traditional Banking
Trends and preferences are constantly changing as clients become more tech-savvy and able to easily interact with the latest technology. For example mobile and online banking is now common place; there are fewer barriers preventing new players from entering the banking sector. Banks with multiple high street branches are being challenged by less stringently regulated and lower cost competitors. This is most apparent in peer-to-peer lending and tech companies which offer EMI (Electronic Money Institution) services. Even when you take a wider, more general look at banking services you see that there is increased competition from companies like Paypal, Valyuz and MoneyBookers which are used for payments once made only through conventional brick and mortar banks.
Once we thought that the digital marketplace was just a passing fad but now we know it is here to stay and going digital is essential for all companies including those in the finance industry.
In the present commercial environment financial suppliers are expected to provide clients with a first rate user experience where transactions are effortless and low-cost. For Fintech firms, EMIs want to automate the systems, reduce expenses and also offer superior service.
What’s New in the European Finance Industry?
From the User’s Perspective:
- Overall Experience – We are living in a digital world where everyone is familiar with the digital environment and expects almost all services to be available digitally, especially banking services. The user experience needs to be of a high standard with designs that are easy-on-the-eye and easy to navigate, mobile-friendly and available as an iOS and Android app.
- Making Life Easy – We are all familiar with effortless online processes where all it takes is a quick login and one or two clicks to get what we need. Traditional European banks usually have antiquated websites and little or no mobile presence. While innovative Fintech businesses provide the latest mobile access which can complete transactions in minutes if not seconds.
- Cost Efficient – In the eyes of customers they deserve automated banking activities online while also being cost-efficient and competitively priced. Customers know that traditional banks have countless employees manning numerous branches all of which add up to vast expenses while Internet banking services are considered quick, efficient and with lower fees.
From the Financial Companies’ Perspective:
By going digital and fully automated financial companies can reduce expenses. They can also make AML easier through live monitoring for illegal activity. A major issue facing conventional banks today is an inability to improve their banking systems sufficiently and adjust to the increased KYC (Know Your Client) and AML (Anti Money Laundering) regulations procedures now in place. EMIs on the other hand usually operate newer and more advanced banking systems which make them appear to financial companies as insusceptible to fraudulent activity.
Hopefully this information has shown the complex challenges facing traditional European banks as they encounter the evolving financial systems in Europe. The changes and challenges are generally positive in nature and should be supported by customers and companies who will benefit from the overall improvement in European banking.
GBO International Financial Services LTD is fast becoming a world leader in providing corporate services for international companies. These services include assistance with: incorporation of companies, opening business bank accounts, licensing, payment solutions, nominee services and more. GBO offers the most innovative A to Z financial solutions for high-tech companies, eCommerce, and more