Nothing stays the same

This applies to life and to business and finance. For years, financial institutions have maintained the same business models that guarantee them high profitability. With recent advances in technology, and in particular financial technology, there is pressure to move with the times to get crushed in this new wave of change.

But what exactly does this change look like? Here’s a look at ways in which recent technological advances have changes the way we do business.

Riding the line between high frustration and high profitability

Previous financial models have appealed to either the tech-savvy customers or those that are particular about the price. Advances in technology have allowed upcoming financial institutions to meet the needs of clients highly frustrated with these old financial models while making high profits.

For example, whereas many banks charged high fees for international money transfers and took several days to have it done, financial technology companies have found a way to make this process cheaper and faster and made themselves quite some money in the process.

Considering data as an asset

Data is one of the greatest assets for any business, especially a financial institution. How that data is used can determine the success or failure of that business. Innovators are making use of this data to make critical financial decisions. For instance, a lending institution can determine whether to approve your business loan or not based on your customer base on social media and your response to your clients.

Light on capital

Advances in technology have enabled growth in revenue for businesses without requiring more capital. By providing platforms where potential clients can interact and do business, you can grow your customer base and revenues with virtually no added capital. The clients pay a minimal fee to be on this platform or they can pay you a percentage if they manage to seal a deal. The same concept has been used for crowd funding platforms.

Automating processes

One of the advantages of technology is automation of previously manual processes. This has been applied in the financial industry such that manual processes that were only meant for an elite class are now accessible to more people. For instance, some companies are now offering asset allocation, investment advice, debt review and tax minimization strategies to customers online at a fraction of the cost of having a face-to-face conversation with a wealth management adviser.

As a result, there are more people getting in on this which has increased the customer base and earned the companies some revenue from subscription charges.


Innovations in the financial services sector are often regarded as disruptive to the way things have been. As a result collaboration between the ‘new way’ and the ‘old way’ may be considered sacrilegious to those on either extreme. However, there are ways in which collaboration can be conducted for the benefit of both parties.

Innovators can ride on the scale and infrastructure of established systems while they can gain from the innovators’ new perspective and strategic advantages. This ensured that both make some money without losing any customers in the process.