Cutting-edge technology, coupled with the disruption of COVID-19, has driven significant change in the banking industry this past year. Consumers are now more apt to choose online banking services – a trend that’s been bolstered by the continued ingenuity of the fintech segment. And while customers are keeping banks on their toes with continued demand for new tech, we expect that demand to be accompanied by new policy and regulatory pressure in the next five years.
In a recent Forbes Financial Council discussion, I spoke about how the black swan event of the pandemic will prompt a regulatory reckoning of sorts within the fintech segment. You need only look back to the Great Recession, less than 15 years ago, for evidence of how these once-in-a-lifetime experiences lead to renewed regulatory focus. At that time, we saw significant scrutiny of banks’ credit policies and risk management practices.
Over the past year, COVID-19 has highlighted inconsistency across every risk category and the continued need for enterprise risk management. And as fintechs claim a greater share of the market – and customers’ money – don’t expect these media darlings to continue to fly under the regulatory radar. We expect this will be the moment when they will finally have to play by the same rules that govern banks.
Looking for other smart tips from the Forbes Finance Council Experts? Check out other changes predicted for the banking industry in the next five years.