It is without doubt that, over the last decade or two, the financial industry has changed both radically and progressively. Gone are the days where your statement was only available during bank opening times. These days, most of the financial market place revolves around credit and 24/7 access to it. The industry has continued to evolve and along the way it has met some challenges; none more famous than the 2008 financial crisis.
Over the next couple of years the industry is likely to face even more obstacles that will transform global banking forever. Technological advancements alone pose a huge threat to the industry, as alternative lending providers and small banks blaze a trail in online financial technology.
Technological Overhaul
The UK’s major banks are in need of a technological overhaul, yet they are burdened with an IT legacy and a system that is difficult to change. New banks benefit from this situation as it is much easier to build a new IT system from the ground up. What’s more, new banks no longer have to climb obstante barriers to entry, thanks to the existence of online banking. These two elements, combined with a sense of mistrust against the major banks, means more people are turning towards new financial institutions and alternative finance providers.
The Next Big Disruption
When it comes to seeking financial services in the future, 73% of Millennials are more excited by the prospect of financial offerings from Amazon, Google, Apple and PayPal than they are from their own bank. This figure, put forward by the Millennial Disruption Index, represents an interesting prospect for global technology firms.
Virtual currency, such as bitcoin, is also growing in popularity and evolving all of the time. This could totally disrupt the financial transaction process as independent currencies are controlled only by market operations. The Government and our major banks may not have the power or time to prevent this trend from rising.
Peer-to-Peer Lending Platforms
Peer-to-Peer lending platforms, such as Wellesley’s asset backed offering, are pioneering in terms of online technology. They offer an alternative to high street banking, with more attractive rates and a completely transparent process. It is important to note that whilst Peer-to-Peer Investing offers higher rates than traditional banking methods, capital is at risk and profit is not guaranteed. Here at Wellesley & Co we provide all the information you may need on our Peer-to-Peer lending process.