“Today’s program looks at the emerging financial battlefield. Mike, so much of our world today is being shaped by technology. It should therefore not be a surprise that technology has come to the financial services industry and is shaking it up. Give us the sides and the strategies.”
“Well we’re of course senior citizens, and we grew up with what I will call a “traditional financial service sector”. You had banks. You had stockbrokers. You had insurance agents. You either went to see them at their office, or sometimes they actually came to see you. It’s all face-to-face contact.”
“Now there are new financial service firms that are FinTechs, and they operate in cyberspace. You never see anyone. You do all of your financial servicing with them through an app, or through a computer portal. And they start out doing simple things like offering savings accounts, maybe insurance, but it’s been so successful, FinTechs have been so successful, they’re now branching out, and you see many of them branching out into all kinds of areas related to money, becoming full service operators.”
“Now FinTechs, as you might expect, appeal to young people, Millenials and iGeners, because they grew up with information technology, and what the FinTechs are banking on, no pun intended, is that as those generations age, and they build up their savings, there’s going to be a bonanza there of service to be made to them.”
“But don’t expect those traditional banks, and stockbrokers and insurance agents to sit back and just take this. We’re actually seeing many of those get into servicing their clients through cyberspace. So this is going to be the real battle. Will the FinTechs be able to survive as the traditional firms try to replicate what those FinTechs are doing?”
Mike Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in
the Department of Agricultural and Resource Economics at North Carolina State University who
teaches and writes on personal finance, economic outlook and public policy.