Banks Battle Big Tech for Payments Supremacy: Report

<p>The financial landscape is undergoing a significant
transformation as big tech companies like Apple, Google, and Amazon make
inroads into the payments industry. This has traditional banks scrambling to
adapt and compete, with many turning to fintechs for help.</p><p>According to a recent report by Economist Intelligence,
as quoted by Finextra, nearly half of all banks are considering acquiring
majority stakes in fintechs to bolster their payment offerings and stay ahead
of the competition. This move is driven by the recognition that big tech
possesses an advantage in terms of user data, customer reach, and technological
expertise.</p><p>The shift towards big tech in the <a href="https://www.financemagnates.com/terms/p/payments/">payments</a> space is
also being fueled by changing consumer preferences. Younger generations are
increasingly drawn to the convenience and seamless user experience offered by
super apps like Apple Pay and Google Pay. They are less reliant on traditional
banks for everyday transactions, preferring the ease of integrating payments
with other online services.</p><p>Growing Influence of Big Tech in the Financial
Sector</p><p>As the presence of the big tech in the financial sector
grows, so does the scrutiny from regulators. Banks are advocating for a level
playing field, arguing that big tech companies should be subject to the same
rules and regulations as traditional financial institutions. This call for
fairness is gaining traction among policymakers, who are concerned about
the risks posed by the influence of the big tech firms in the
financial system.</p><p>While banks are looking to fintechs for help, some
experts believe that a more collaborative approach may be necessary for both
sides to thrive. By leveraging each other's strengths, banks and big tech could
create a more innovative and competitive payment landscape that meets the
evolving needs of consumers.</p><p>Fintech is rapidly <a href="https://www.financemagnates.com/fintech/fintechs-role-in-financial-guidance/">transforming the way people manage their finances</a> and make investment decisions, according to a recent
report by <a href="https://www.financemagnates.com/" target="_blank" rel="follow">Finance Magnates</a>. Traditional financial advisory services are often
limited in their accessibility, affordability, and personalization. However,
<a href="https://www.financemagnates.com/terms/f/fintech/">fintech</a> offers a more inclusive, data-driven, and user-friendly approach to
financial guidance.</p><p>Fintech Taps Innovation for Efficiency</p><p><a href="https://www.financemagnates.com/tag/fintech/" target="_blank" rel="follow">Fintech</a> is also playing a role in increasing
financial inclusion. By providing affordable and accessible financial services,
fintech is helping to bridge the gap between the banked and unbanked
populations. This is particularly important for marginalized communities that
have historically been excluded from traditional financial institutions.</p><p>Besides that, the financial services industry is
undergoing a transformative shift driven by <a href="https://www.financemagnates.com/fintech/ai-and-ml-reshaping-fintech-insights-from-stx-next/" target="_blank" rel="follow">the adoption of artificial intelligence (AI) and Machine Learning</a>. These cutting-edge technologies are
empowering fintech companies to operate more efficiently, scale their operations,
and make more accurate decisions.</p><p>The financial services sector has embraced AI at an
impressive rate, with 72% of firms having integrated AI into their operations,
according to data from the Bank of England as quoted by STX Next. This adoption
rate outpaces the 55% across all industries.</p>

This article was written by Jared Kirui at www.financemagnates.com.