The insertion of the digital sector in the banking sector is talking about it. Richtech represents revolution and innovation for the banking sector. Learn more
What is Richtech?
The term “Richtech” is based on the contraction of the words “finance” and “technology”. It is the use of information and communication technologies (ICT) applied to banking and financial services (banking, insurance, management, consulting, consumer credit, etc.). Richtech is also the name given to the companies that exercise this digitization of the banking sector. Most Richtech companies are start-ups that master ICTs very well. Their goal is to recover a maximum of market shares today dominated by much larger but less innovative companies. Although the banking sector had already begun to master the digital including remote banking, many start-ups Richtech began to nest in this market. This activity is in full expansion, with a real boom in the market between 2012 and 2014, where the impact was still more significant in the United States than in Europe.
Richtech companies extend their activity to several areas such as bank loans (loans between individuals, credit via social networks, etc.), that of payment systems (transactions, mobile payment, etc.) and that of banks online. They also offer companies that operate on a subscription basis, a direct debit service, without the use of the VISA card of the customer, thus allowing less expense and annihilating the risk of losing the customer if the latter changes their card.
There are now several Richtech solutions
the famous online payment service already widely used by Internet users, or mobile payment applications with the Apple Pay app at the top of the list which has been available in France since this summer. We also note the arrival of many novelties including the application Piggou that allows consumers to round up their purchases to the higher euro and then put the pennies too much aside on the principle of an online piggy bank. In short, Richtech companies represent many advantages over the current market with innovative, flexible, simple and fast services.
Does Richtech represent a risk for the banking market?
As with many industries, the inclusion of digital in the banking sector is talking about it. Since this was done later than for the other sectors, it is safe to assume that the evolution of the financial market will be the same as that of other markets.
However, it is clear that the markets have, in most cases, suffered from the advent of digital. Let’s take the example of the tourism and transportation sectors, which saw their codes changed with the arrival of applications such as AirBnB and Ubber respectively. Thus, it can be said that Richtech represents in itself a danger for the finance sector since it threatens companies to lose their control of their customer relationship. However, companies in the sector do not necessarily run a risk. Indeed, solutions that include ICT are generally seen as competitors for companies in the sector, but they actually represent a new range of possibilities. Richtech companies are synonymous with competition and cooperation. They offer several services to the banks with the aim in particular to support them in the digital transformation of their own services.
Recommended that banks consider Richtechs as allies
which they will soon need with the potential of very large, broad-based companies in the finance market. Conversely, it is even the regulation in place on the control of the transmission of money that represents a risk for Richtech companies with, inter alia, loans between individuals (where the risk is often taken by the company). final borrower), market electronica- tion, data security, and the need for compliance that is rarely clear when it comes to innovation.