Digitally disrupted or reinvented? This is the provocative question of the last Accenture report on fintech (i.e. “The Future of Fintech and Banking: Digitally disrupted or reimagined?”), which clearly represents the crossroad many traditional finance actors have to face these days. Banks and other financial players know they have to take action to innovate their offerings and business models if they want to stay competitive and relevant to the consumer.
While many larger banks have already initiated corporate venturing activities or innovation programs to expand and upgrade their offerings into the fintech sector, smaller, local credit institutions are responding at a slower pace, often not sure of which of the many digitalization paths to pursue. We at Crowd Valley have seen various of these cases and have assisted banks’ Innovation Directors and internal ventures to deploy the best innovative solutions for their needs.
Online Marketplace Lending
In some cases banks may want to adopt new digital tools in order to deploy and pilot new business lines, such as commercial credit or consumer lending applications. In particular, local banks could leverage local communities through peer-to-peer lending portals, in order to capture all those opportunities that the local branch would otherwise reject, and, at the same time, foster credit to local SMEs. This is something, for example, that is already happening frequently in the UK, where a recent law makes it mandatory for banks to refer rejected loan requests by SMEs to alternative finance portals.
Digital Fund Management
In some other cases, financial institutions may want to digitalize their funds administration process, which is a set of various and often complex activities carried out in support of the actual process of running a collective investment scheme. This often involves regulatory compliance, multiple stakeholders and a good dose of paperwork. By adopting a digital solution, like Crowd Valley Digital Back Office, banks can have access to a simple interface through which administer and streamline multiple funds a products, while ensuring every procedure is compliant and standard security measures are in place. This results in more efficient operations, which can help reduce overhead costs and allow to focus more on the quality of the service.
Once it is decided which strategic path towards innovation is worth pursuing, the typical decision that New Business Managers of local banks have to face is developing the new digital tool by using in-house resources or external APIs. From what we observed, the former choice may lead to a slower time to market, due to technological complexities as as well as frequent checking of regulatory compliance of new procedures. The latter option - adopting an API, like Crowd Valley’s - allows swift deployment and usage, and also allows efficient validation in order to roll out into the large financial institution once proven. For more information on Crowd Valley’s API, please get in touch with our team.
Image credit to: UnknownNet Photography
Online Marketplace Lending
In some cases banks may want to adopt new digital tools in order to deploy and pilot new business lines, such as commercial credit or consumer lending applications. In particular, local banks could leverage local communities through peer-to-peer lending portals, in order to capture all those opportunities that the local branch would otherwise reject, and, at the same time, foster credit to local SMEs. This is something, for example, that is already happening frequently in the UK, where a recent law makes it mandatory for banks to refer rejected loan requests by SMEs to alternative finance portals.
Digital Fund Management
In some other cases, financial institutions may want to digitalize their funds administration process, which is a set of various and often complex activities carried out in support of the actual process of running a collective investment scheme. This often involves regulatory compliance, multiple stakeholders and a good dose of paperwork. By adopting a digital solution, like Crowd Valley Digital Back Office, banks can have access to a simple interface through which administer and streamline multiple funds a products, while ensuring every procedure is compliant and standard security measures are in place. This results in more efficient operations, which can help reduce overhead costs and allow to focus more on the quality of the service.
Once it is decided which strategic path towards innovation is worth pursuing, the typical decision that New Business Managers of local banks have to face is developing the new digital tool by using in-house resources or external APIs. From what we observed, the former choice may lead to a slower time to market, due to technological complexities as as well as frequent checking of regulatory compliance of new procedures. The latter option - adopting an API, like Crowd Valley’s - allows swift deployment and usage, and also allows efficient validation in order to roll out into the large financial institution once proven. For more information on Crowd Valley’s API, please get in touch with our team.
Image credit to: UnknownNet Photography
 | About the author - Irene Tordera Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives. During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem and she works also for the European Crowdfunding Network. |
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