Although we’re living in an advanced digital era, its benefits have not yet addressed the challenges of financial activity.
When opening a bank account, have you ever fully understood the banker’s explanation of terms and agreements of the financial act or product? I still vividly remember a recent moment when a banker sounded like he was rapping to me when reading through the contract. I was like, “could you slow down a little bit? I can’t follow it all.”
Have you ever tried to compare financial products but ended up giving up in despair? Things like, what kind of credit cards are the most suitable for you, or which financial plans will benefit you the most?
When I was an analyst at JPMorgan, I mainly handled financial deals from New York, Singapore, and Hong Kong. Every day, I was blown away by how complicated FX (Foreign Exchange) remittance process is — much more complex I could have imagined. It is difficult to describe the trials and hardships my clients and I had to go through every day.
Yes, finance is so complicated despite its centrality to our lives. Of course, although money can’t be everything, without money, we experience difficulties. In this sense, we always want to manage our financial life wisely. Nonetheless, this remains hard for us.
Can Fin-tech clarify this?
Yes, Fin-tech has been a buzzword for many years: it is a portmanteau of finance and technology. Let me clarify this through an amazing explanation from Jacob Park’s article (I translated his article into English).
“Fin-tech refers to providing a traditional finance experience in a better way by incorporating various state-of-the-art technologies. Among many areas, Digital Financing, Payments, Blockchain, and Digital Wealth Management have been major four fields, that have seen significant progress.”
Here are the brief descriptions of each:
- Digital Lending: a service that allows you to allow request and repay a loan through an online platform. The key players are: Lending Club, OnDeck, and Sofi.
- Payments: a service that makes it easy to make transaction. The key players are: Paypal, Venmo, Wepay, Samsung Pay, and Apple Pay.
- Blockchain: data distribution processing technology.
- Digital Wealth Management: a service that helps you manage and operate your assets easily and efficiently through digital platforms. The key players are like: Betterment, Robinhood, Nextcapital, Acorns, and Stash.
Thanks to Fin-tech, our financial lives have become much easier and more convenient. Not only for individuals, but for the society overall, Fin-tech has been resolving some issues by increasing the accessibility of better personal financial management.
Given that nearly 2 billion people in the world do not have access to conventional banking, it is noteworthy that such a small device, mobile phone, can enable their access to efficient financial services. Kenya has pioneered the use of a mobile banking system called M-pesa. It’s hugely significant that 96% of Kenya population uses this mobile banking service, enjoying its advantages. Take a look at this interesting video from @CNBC!
By only thinking about the fact that some of you might be using Venmo even now, Fin-tech is already deeply intertwined in our lives. And yes, it will resolve our difficulties to better our financial lives.
How is Fin-tech going to solve our difficulties in our financial lives?
- It brings simplicity rather than complexity.
Remember all those hassles you have to go through during authentication process when sending money or managing your assets? Some Fin-tech, such as fingerprint or face recognition, is already resolving such issues, and many more to come. In terms of finance consulting, Artificial Intelligence (AI) might give us the same experience as meeting a banker in-person in a much simper way.
2. It also brings simplicity to companies.
Fin-tech might mitigate all the complex transaction procedures within general companies and traditional financial institutions. This not only increases consumer’s satisfaction level, but also overall consumers’ brand loyalty. Perhaps, some back office jobs at investment banking might get simpler once more advanced Fin-tech develops.
3. It brings friendliness.
Unlike traditional heavy and imposing preconception for finance (banking), Fin-tech helps represent finance in a more friendly way. Due to Fin-tech, now finance may become more friendly, rather than being too intimidating.
Why do I want to talk about Fin-tech and User Experience?
If you ask me this question, I would answer like this:
“Because finance is not about wants, but about persistent needs.”
Was it too simple an answer? Although it might sound too simple, I believe this is the key to the whole question. To recap this important concept, here is the difference between wants and needs:
- Wants: refers to something that you feel that you desire, but it doesn’t mean that you cannot live without having it.
- Needs: refers to something you must have, something you can’t do without.
One might argue that Fin-tech falls into wants as one method among many traditional finance forms. But I would argue that once this formula, future finance = Fin-tech, is established and as we’re heading toward in that direction, Fin-tech will be forever needs, rather than wants. If you are an ordinary citizen making and spending money in your life, “having a more efficient financial life” would be a forever need.
In this regard, whatever the medium will be (mobile phone for now, but it can be a robot in the future) how to provide better user experience in Fin-tech can be a very important condition that would meet people’s needs for good.
In the near future, the majority of people will stop carrying physical wallets. However, it does not mean that people do not want to carry them. Instead, it is an experience that people want to have: one of safety, convenience, and efficiency in their financial lives.
Of course, some challenges including trust or security deserve thorough discussion regarding Fin-tech. However, it is safe to conclude that businesses these days are selling their experiences, rather than products. Given the fact that financial services have been traditionally an industry selling services, the significance of user experience within the industry is much more imperative, especially with the emergence of Fin-tech.
In this regard, if Fin-tech does not want to be stopped merely as a buzzword, putting substantial efforts in creating a new and better user experience is a must. Otherwise, Fin-tech itself might not bring any new values to users, sadly becoming redundant tool, reproducing our prior challenges but in digital ways. However, if it works, whoever creating a better UX in Fin-tech will be a game changer in near future.
Thanks for reading!