Over the years, banks held a monopoly on financial services as they had complete control over the industry. However, with the advancement in the technological space and the increasing need for more seamless and accessible financial services, customers began to expect on-demand services that were easy to use from anywhere they are, and then came the emergence of Fintech companies.
Fintech companies are businesses that utilize technology to modify, improve, or automate financial services for consumers or businesses. Indeed, Fintech companies are known for utilizing innovative tools and technology to enhance customer experience.
Artificial intelligence, for example, can be used to analyze vast amounts of data to help customers make better financial decisions or to identify and prevent fraudulent activity. Also, they make use of other innovative tools such as Blockchain technology, which helps to facilitate faster and more secure transactions.
Mobile apps, on the other hand, can provide customers with access to financial services on the go, from anywhere in the world. These technological advancements have transformed the financial ecosystem and have made financial services more accessible and user-friendly for everyone.
Their service offerings span across various areas. These include digital payments, lending and borrowing, personal finance management, trading and investing, insurance, and traditional banking services. The medium they used are online banking, mobile banking, and credit monitoring. The faster and more efficient services they provide are often at a reduced cost. All these services have been made available without having to visit a physical location, disrupting the traditional banking system.
According to Statista, Fintech Nigeria has projected that the number of users in the Digital Payments segment will reach 146.10 million by 2027. Nigerian commercial banks have long been plagued by issues that have left many customers dissatisfied and stranded at various times. The cumbersome and outdated banking systems, long queues, and inadequate customer service have made banking a frustrating experience for many Nigerians.
However, with the entry of fintech companies into the Nigerian financial services industry, things have started to change. Fintech companies have raised the bar with their seamless services, which have proven to be especially useful during difficult times. An example is the recent cash crunch that occurred, earlier in the year due to the currency redesign. During this period, the only available means of transaction was through transfers, many businesses MSME’s and individuals switched to well-known fintech apps such as Opay, Kuda Bank, Palmpay, and Pocketapp. These companies were able to offer efficient and reliable services that commercial banks were unable to provide.
Fintech companies have been able to fill the gaps left by commercial banks by offering innovative solutions that cater to the needs of rising customer needs. They have developed mobile apps that make banking more accessible, digital wallets that provide greater convenience, and online payment systems that are faster and more secure.
Moreover, fintech has been able to offer these services at lower costs than commercial banks due to their lean business models. Fintech apps like Kuda, Opay, Palmpay, and Pocketapp have gained popularity in Nigeria due to their user-friendly interfaces, innovative services, and competitive pricing. Apps like Piggy Vest also have its own popularity in terms of saving and percentages on the R.O.I based on the amount saved and method used. Unlike regular banks, customers are paid due interest upfront immediately they save. The medium of saving is what determines the amount of interest.
Compared to traditional banks, Fintech companies often have fewer regulatory processes, which allows them to offer faster and more efficient services. They also tend to have lower overhead costs since they do not operate physical branches, and this translates to lower fees and interest rates for their customers.
Fintech companies have gained popularity in Nigeria due to their focus on using digital savviness to improve customer satisfaction. Despite losing some customers to fintech companies, banks have demonstrated a keen interest in investing in pioneering startups that can assist them in expanding their operations, fostering product innovation, and effectively competing with fintech firms.
However, there is potential for collaboration between banks and fintech beyond simply developing new products. By working together, they can also address regulatory challenges and ensure that innovation is not hindered by regulations, and also bank-fintech partnerships can give fintech speed into the market.
The Roles of Market Research in Bridging the Gap in the Financial Ecosystem
Some roles market research can play in bridging the gaps in the financial ecosystem and how market researchers can proffer solutions within the need gaps::-
- Unearthing the emerging trends in the so- emerging market and also proffering insights on how best to serve the customers within the ecosystem
- Enmeshing big data analytics with on-the-go financial services to get optimum satisfaction.
- Data from market research can help create healthy competition within the financial ecosystem.
- Data is the life wire of any organization therefore this would help keep the ecosystem informed of the ongoing trends and also how best to merge those trends.
Are you a Fintech company looking to use market research to bridge the gap in the financial Ecosystem, Webhaptic Intelligence is guaranteed to assist you in gathering quality data to improve your business.