Traditional banks in Africa have trust advantage over Fintechs - Fintech

A recently published report by CR2 on Africa's Fintech transformation suggests that traditional financial institutions can still be part of the FinTech Finanz Revolution if they use one of their most important assets: the trust of customers.

partnerships between banks and fintechs

The Test report demands financial institutions that want to accelerate their success in the FinTech area, emphatically, to enter into partnerships with fintech startups and technology companies. With such partnerships as well as their long -standing customer networks and a precise defined regulatory environment, financial institutions can further expand their share in the digital market of Africa.

In order to illustrate the importance of the cooperation between banks and fintech, the CR2 report refers to the History GTB, customers lost after their mobile banking platform had gone offline. The report then contrasts the GTB's accident with the rise of the VC-supported Fintech startup Kudabank, whose customer base has risen from 300,000 to 1.4 million in less than three years.

The report argues, however, that traditional financial institutions can still compete with VC supported fintech startups if they decide to use their most important asset: the trust of customers. This perceived trust advantage of customers is proven by a fintech study that was carried out in Nigeria by the consulting firm McKinsey Consulting.

trust remains the key

According to the results of the study, about 67 % of bank customers in Nigeria had more confidence in their bank than in FinTechs. Although this study came to the conclusion that Nigerian banks had occasionally made some missteps, she still found that consumers still hesitate to switch to FinTech products. Although access and convenience are important aspects for customers, trust is still of crucial importance, and this gives financial institutions an advantage.

Finally, the CR2 report calls on the banks to take the opportunity to expand their share in the African market for digital finances. The report says:

"Long-term financial institutions have to react with innovation services that were developed by working with partners for digital banking platforms. The banks that confidently combine their customers with new innovations on the product and platform page will be characterized in the African fintech landscape of the 21st century."

Who do you trust more, traditional banks or fintech startups? Tell us your opinion in the comments below.

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