The way we bank around the world has changed forever. Thanks to the introduction of digital tools like APIs, the migration to open banking and the dramatic change in customer preferences, the bank has taken a step ahead of retail and is developing products that put consumers first.
In a recent virtual arena, FF News invited Ruediger Vogt, Head of Payments 4.0 at Giesecke+Devrient, and Ramsey El-Dabbagh, who works in business development for Algbra, to discuss the growing ecosystem being developed around personalized banking. We are now faced with a clientele that is more active and connected to what financial institutions do and what they can offer them as individuals.
“In some key communities, when we talk about the values component and the ethical component, people are actively looking for things that are more ethical, more inclusive and correlate with their faith or correlate with sustainability. Our market research revealed that 60% of customers were willing to switch to a more ethical financial institution provider, given that they know how the market works,” said El Dabbagh.
To meet these sustainability and ethical requirements, banks and financial institutions have the agency of new technologies to create products that reach a wide network of people, especially when it comes to those who are struggling. served or completely ignored by the market. Vogt, who has been part of Giesecke+Devrient’s payments evolution for more than a decade, explained how ESG goals need to be met by banks and fintechs by going beyond the targets set by regulators.
“[To enforce sustainability] we are committed to replacing all virgin plastics in our payment card products by 2030 at the latest, with recycled, industrial where possible or biodegradable materials, which we announced last week […] we are looking for ways to accelerate this, and a lot depends on cooperation with our customers,” said Vogt, of the personal investment Giesecke+Devrient is taking to make its product more sustainable for customers.
The two companies represent the past, present and future of banking and how fintech has made strides to challenge the culture of the old guard – Algbra, an ethical banking fintech, launched in 2020, and Giesecke+Devrient has been in business since 1865. Fintechs have the luxury of launching products with new technologies already at their fingertips, real change comes from established institutions experimenting with new options, on the back of old technology and stakeholders cautious.
“You can scale up to tens of millions in niche marketing companies like the US or India, and we see that in our customer base. Being a leader in the niche with a dedicated following can be a better model than trying to be everything to everyone and therefore becoming unattractive and irrelevant to many customers,” Vogt explained. What is needed for financial institutions to innovate and reach out to the underbanked or unbanked clearly matches their individual needs, as no customer is the same.
From this perspective, major banks and fintechs have realized that people expect more from their financial service providers. In a world of instant gratification and digital multiplicity, consumers have more options and foresight to shop – so it’s the banks’ goal to bolster their products and give them what they want.
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