Technological disruption has forced the hands of community banks and credit unions to step up and digitize.
In the face of a pandemic that saw nationwide lockdowns, banking software providers are helping their clients digitize for a better customer experience. Smaller banks might have to move to the cloud and adopt an open banking approach to integrate up-to-date third-party solutions into their platforms to stay competitive in an evolving industry.
The pandemic created an environment where financial institutions needed to support their local communities in a branchless capacity without compromising on service. Many saw an increase in their digital banking services and consumers are now more likely to use online banking services than ever before. BAI, a nonprofit that produces insights on the financial services industry, found in its research that 52% of customers are using digital banking applications more since the start of the pandemic and that 87% of consumers plan on maintaining their increased digital usage after the pandemic.
Benjamin Metz, head of digital at Jack Henry & Associates, says fintech disrupted the financial services industry and propelled it into the future. He says fintechs like Venmo and Square took over consumer lending, and big banks and fintech partnerships are increasingly becoming the norm. Last year, Goldman Sachs and Amazon partnered to provide lines of credit up to $1 million to merchants selling on the Amazon platform.
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