The pandemic has undoubtedly had major consequences for everyone. This has been accompanied by the social and economic changes necessary to adapt to the circumstances.
Businesses must adapt to this through digital transformation and by offering new products to their customers.
Mental change and post-pandemic adaptation
With COVID-19 pandemic, we change the way we interact with each other and get used to social distance. This, together with the restrictive measures imposed to prevent contagion, has led to a significant increase in the use of new technologies in our daily lives.
Banks have been no exception. Digital banking and its advantages in relation to online banking have grown exponentially in this new era.
Although restrictive measures have been eased, most people have become familiar with the use of online platforms to carry out procedures. This has generated a new way of understanding all procedures, which is more convenient and faster, as it can be done from anywhere and immediately.
Banks have adapted by digitally transforming and offering new banking products in line with the current situation.
Digital transformation and new banking products
Although banks were starting a transformation process that already included new online services and more changes were planned, the pandemic has accelerated the process.
Traditional banks have tried to anticipate the evolution that is taking place around 100% digital banks, so as not to lose customers in the competition with these new entities. Thus, they have created and offer their customers new banking products, such as Bizum, and offer online services through their own applications or through their website.
This is because the growth of new online banks is causing them to begin to have a significant number of customers. These online banks have the advantage of not having the rigid structure of traditional banks. In addition, they are adapted to new technologies and offer all their services through the internet, as well as new forms of payment, known as FinTech.
Digital acceleration through FinTechs
The term fintech refers to all financial services applications, processes, products and business models that are composed of some complementary service that reaches customers via the internet.
These services are related to money in some way. They are divided into four types:
- Operational tools and means of payment.
- Customer knowledge and Big Data.
- Security and identification of persons.
- Electronic money.
Although FinTechs were already well developed in terms of market integration, the coronavirus has helped their growth to accelerate. As the market has suddenly transformed and it has become necessary to operate entirely through the internet, FinTechs have emerged as the best way to do these financial transactions.
The premise of FinTechs is to offer different solutions to their customers, with the aim of adapting to the new existing scenarios. In this case, there has been a behavioural change in the entire population, who needed 100% online solutions.
These new products are being created and managed mainly through startups.
Digital security: monitoring bank fraud
In recent years, cybercrime has increased exponentially, with the banking sector being one of the most affected. This is due to the digitalisation of a sector in which more and more users are using electronic means to manage their transactions.
As a result of this problem, financial institutions have important security controls. Some of the most common measures are:
- Request users for several controls when performing an operation. For example, username and password, bank coordinates or signature via App.
- Monitoring operations to detect anomalous transactions and inform the user.
In addition, banks also fight fraud for prevent money laundering. They do this through various measures, such as identity verification or digital identification of new customers.
As we have seen, the pandemic has brought with it a new understanding of banking. For most users, it is essential to be able to carry out transactions online. For this reason, online banks have grown significantly and traditional institutions have implemented online transactions to adapt to the new times. FinTechs are financial market transactions carried out over the internet and are being created mainly by startups. Banks are using them, in addition to improving security systems against fraud.