Fintech, short for financial technology, is a new banking technology that is directly competing with traditional banks. These startups focus on the customer by leveraging the cloud and providing automated delivery of financial services, such as microloan lending and invoice financing. This means that banks need to revamp their own technology to compete.
Just a few years ago, banks didn't see a threat. But more recently, their reaction was to regulate fintech startups to protect themselves. Today, banks are finally realizing that it is time to partner with fintech startups, but they aren't particularly sure how to do this.
For starters, banks are not about taking risks. They want to ensure that nothing goes wrong and, therefore, put a tremendous amount of effort into risk management. This is a major issue because this way of working stifles tech innovation. On the other hand, fintechs are all about taking risks.
Who's Got The Concept?
There are, however, some banks that are catching on. These include JP Morgan, Bank of America, CapitalOne, Goldman Sachs, Credit Sussie, and Citibank for example. These banks are taking in their fair share of digital customers and growing their market share by actively engaging in fintech space.
At the present time, JP Morgan has the highest number of mobile banking customers. They achieved this by investing in fintech that prioritizes payments, infrastructure, and cybersecurity, according to CB Insights data.
By forming partnerships will fintech startups, banks can leverage more digital customers. Some of these fintechs include:
Bill.com: JP Morgan partnered with this fintech in September 2017. This allows customers to send and receive electronic invoices and payments.
LevelUP: JP Morgan partnered with this fintech in December 2016. This allows customers to preorder food and drinks and then make the payment at participating QSRs.
Stripe: This is a payment processing fintech and secure revolving credit facility.
OpenFin: This fintech provides software infrastructure that helps banks create and upgrade trading apps.
Banks are Making Changes to Appeal to Java Developers
Banks are like corporations in the sense of their company culture. They have a rigid way of doing things. However, when it comes to tech developers, these professionals are creative people who do not want to work within such a constrictive environment. Therefore, banks are making the necessary changes needed to attract tech talent, especially in New York. For example, they are more relaxed about dress codes, giving opportunities that are challenging, and providing ongoing professional development in the Java field. However, the pay is probably the most important change they are making. Since banks need to compete with fintech startups, they are now paying more competitive salaries to attract the best talent. And it goes further than this. Banks are now offering roles that didn't exist just a few years ago. These roles comprise artificial intelligence, distributed ledger technology, and machine learning.
The one thing banks have that fintechs do not have is financial data. This is one of the biggest reasons tech companies want to partner with banks. When a tech candidate applies for a banking position in New York, they have access to helping people access financial services they would otherwise not be able to. This presents just the right challenge tech candidates are looking for today.
All in all, banks need to indicate that they understand current technology to attract the best talent. For this reason, banks need to adapt to fintech and the tech sector as a whole or go under.
New York is Now the Home to Tech
San Francisco used to be the tech capital of the world, but the flag has now passed to New York. From Manhattan to Brooklyn and smaller Burroughs throughout the city, New York is now home to some of the biggest tech names, such as IBM, Seamless, and Google. For this reason, New York is the prime spot for new tech talent. In fact, New York has not only beaten San Francisco, but it has also placed first among cities such as Amsterdam, Boston, and London.
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