All over the world banks are consumed by the fear of fintech takeover, where banks lose their importance to financial services that operate on a more accessible and easy to use model and that are usually free of all sorts so fees or significant repairs that the bank. Most of the traditional institutions can agree that while fintech won’t be putting them out of business quite yet the possibility is getting stronger every year.
Fintech has had a great year while the traditional banks keep living with the anxiety of possibly becoming extinct in the future because they are also longer able to provide the services that the consumers are looking for, so they opt for less conventional but still effective method. While this trend is pretty universal, seems like Santa Clarita Bank is doing just fine for itself and has no fear of fintech take over at least for now.
Staying relevant in the financial world
While banks everywhere are losing client because of these innovative technologies The Bank of Santa Clarita is becoming one of the best customer banks in the states who are able to stay relevant because of their involvement with tech banking, allowing the customer to access the services that most of them are after without having to stray away from the banks and start dealing with their finances through fintech. Fewer people are shying away from fintechs or asking what is Forex, but instead, they are getting involved in the business themselves.
The bank recently published a descriptive record of its fourth-quarter along with the full year, highlighting the successful ear the bank has had, improving in all major directions. Instead of experiencing stagnation last most banks BSCA had a 1% increase, estimating the net earning for 2019 at $3,217,000. The financial set up is changing and people are getting more involved in the industry. But still, that does not mean the banks won’t become vulnerable to these fintechs in the near future.
One of the more alarming signs displayed in the report was that the bank saw along with $9,251,000 of net interest income, which is a 2.4% decrease from the year before. While people may still rely on banks for the majority of the financial services when it comes to landing the fintech have a significantly superior offer.
The possibility of the fintech takeover
Fintech largely took off though its loan systems. While banks may seem more appropriate and dependable the interest rate sometimes can go out of hand pretty quickly and the hight interest rate is actually one of the top complaints about the banks from their customers. It has been said before that fintechs have the major disadvantage of not being dependable but considering there and the decreasing popularity of the banks these fintechs do have a chance of taking over simply because their services are much more geared towards the customer when compared to those offered by the banks.
Fintech offers a lower interest rate but they also approve the loans for those who may not have the best credit score. The unbanked population has benefitted the most from the shift of dynamic in the financial industry and fintech has found a way to infiltrate an unexplored market. But meanwhile, even those who have good credit scores and can get loans from the banks sometimes choose to work with fintechs simply because of their improved conditions.
The Banks of Santa Clarita still reported that the total net loans amounted up to $232.9 million, which is an increase of 1.5% over the previous year so the bank is managing just fine, but largely because of their modest interest rate and the loyalty they have earned for themselves through serving the community for fifteen years. But one of the things that distinguishes BSCA fro the others is just how much importance they place on their digital services.
Focusing on the differences
For a lot of banks, the only way to stay afloat is to give the customer the closest thing they a to fintechs. The increased quality of tech services, allowing the clients to make transactions online without any extra hassle. Promoting remote deposit capture and in general other cash management facilities. The only way the banks can stay at top fo their game, as was the case with the BSCA is to promote the technological aspect of it and to treat it with the same importance as the more traditional banking services and transactions.
The Bank of Santa Clarita has done a great job of elevating their online and mobile banking to emulate the convenience of fintech while also providing the safety and security normally associated with the banks. While the fees remain a bit higher compared too fintechs, actually there are thousands of people who are willing to pay extra in order to conduct these easy transactions with trusted institutions.
It’s important the banks follow the same business model as BSCA and many of the successful banks to avoid becoming irrelevant in the following years. With time the issue of security and safety will be resolved when it comes to fintechs and then banks will have much less to work with compared to now. They are continuously improving and adapting to the demands of the consumers, something that banks rarely ever do. The major change could be an indicator that the power dynamic between the service providers and customers will change according to times.
As long as banks resist the change and refuse to adapt they will be the ones on the losing side. The Bank of Santa Clarita is more of an exception than the rule, most banks don’t want to shift their approach in fears of appearing weak, or thinking that no matter their approach the customers will stay loyal to them. In this day and age, there are so many options that loyalty can only be granted to institutions that provide top-notch services and banks rarely have this attitude when it comes to the quality of their service or the terms and condition they provide for their clients. This is a revolutionary time for finance and those who fail to follow the demands of the customer will have to face the harsh reality.
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