For some time now, the financial market has been undergoing a series of changes, largely due to the advancement of solutions and technologies developed by companies that want to make life easier for companies and direct customers. Therefore, it is essential to understand the difference that exists today between banks and Techfins.

With the constant change in consumption, with the public seeking more and more ease and agility in daily processes, especially financial ones, a space was opened for technology companies to enter this area as well.

But can Techfins already compete head-on with the big banks? And what role can banks still play? From now on, we will tell you the differences between banks and Techfins so that you can understand the best option for your company .

What is TechFin?

It may seem logical to think that Techfins are simply an improvement of what we know as Fintechs, but in fact this understanding goes further. This is an entirely new type of market, and we can define these companies as technology businesses that seek financial solutions for their customers .

As they originate from this technological space, focusing on e-commerce environments, these organizations are connected to several customers, consumers and companies. Often, they combined finance functions with the available data set to then improve their offerings with the customer experience .

In this case, the difference between Fintech and Techfin is based on the origin of the organization. Fintech usually refers to a company where financial services are provided as the core solution, using digital technologies to reduce costs, increase revenue and remove friction in stocks.

Alternatively, Techfins often refer to a technology company finding a better way to provide financial products as part of a broader service offering . Examples of Techfins companies operating worldwide include Google, Amazon and Facebook.

The differences between Banks and Techfins

By better understanding what Techfin are, it is easier to list the differences between them and traditional banks.

We can say that in operations with banks, there is always this point of the traditional, that is, you have processes that have been determined for a long time, which often generate a series of problems for the end customer .

Among them is bureaucracy and the need to deal with a financial manager to meet requests, however simple they may be. Among the other features, we can list:

  • Face : in most cases, services performed with traditional banks require actions in physical branches, dealing directly with people and bank representatives. This often means facing queues to perform simple actions that could already be available more simply;
  • Slow : unlike digital operations, which tend to be resolved in a few moments, with the release or not of credit for example, traditional banks generally have very slow processes, which makes it difficult for companies that depend on a quick return to take a decision.

Techfins, on the other hand, emerge as developers of technology solutions capable of offering financial solutions for companies that seek modernization and agility in their operations in this area .

A basic example of this difference is Techfins' offer to perform banking services along with another complementary and essential service for customers, which cannot be offered by most traditional banks.

Benefits of Techfin

Given the importance of all the data already collected and stored, Techfins can offer financial services , creating direct competition with traditional banks, as they will be able to serve their customers based on 3 pillars:

  • in a safe way;
  • much more agile;
  • meeting the real needs of customers;
  • using the main resources of the digital medium.

As Techfins grows, its data network also evolves, which may show opportunities to offer increasingly specialized services to its customers.

Its ability to reduce transaction costs, provide a more comprehensive data set, and thereby improve decision-making outcomes , boosts confidence for those who were previously only relying on the larger, traditional banking institutions.

Is the difference between these models of banks and Techfins clearer? And which one is your company willing to use to get the most benefits possible?

For your choice, it is important to know that Sky.One has a platform specially designed to serve this market, offering external solutions and financial services in a fast and simplified way, in the cloud. All this through Sky.Simple , a platform connected to the management system and simplifies financial processes.

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Written by

Sky.One Team

This content was produced by SkyOne's team of cloud and digital transformation experts.