A recent CR2 report on the transformation of fintech in Africa shows that if traditional financial institutions use one of their most important assets: customer trust, they can still be part of the fintech financial revolution.

Partnership between banks and fintech companies

this report Urge financial institutions wishing to accelerate their success in the fintech sector to establish partnerships with fintech start-ups and technology companies. Having such a partnership, as well as their long-term customer network and clearer regulatory environment, means that financial institutions can still increase their share of the African digital market.

To illustrate the importance of cooperation between banks and financial technology, the CR2 report refers to story How the Nigerian bank GTB lost customers after its mobile banking platform went offline. The report then compared the misfortune of GTB with the rise of VC-backed fintech startup Kudabank, whose customer base increased from 300,000 to 1.4 million in less than three years.

However, the report believes that if traditional financial institutions decide to use their most important asset: customer trust, they can still compete with venture-backed fintech startups. This perceived advantage of customer trust is supported by a fintech research conducted by consulting firm McKinsey & Company in Nigeria.

Trust is still the key

According to the research results, about 67% of bank customers in Nigeria have a higher level of trust in banks than in financial technology. Although the study concluded that Nigerian banks occasionally make some mistakes, it still finds that consumers are still hesitant to switch to fintech products. Therefore, although access and convenience are important considerations for customers, trust is still crucial, which provides advantages for financial institutions.

In short, the CR2 report urges banks to seize the opportunity to expand their share of the African digital financial market. The report says:

“Historical financial institutions must respond through innovative services established in cooperation with supporting digital banking platform partners. Those banks that combine the advantages of customer trust with novel innovations in products and platforms Stand out in the field.”

Who do you trust more, traditional banks or fintech startups? Tell us what you think in the comments section below.

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