Finance as a Service ( FAAS ) is a revolutionary concept in the financial industry as we have come to know it. As it is a dynamic delivery model that enhances the old manual legacy systems and it provides companies with the fine quality finance management process automation. FaaS also helps companies to manage their working capital better, quick delivery of the accurate forecasts and reduce the operating costs. Clients have been the essential element behind driving the proliferation of the FaaS. High customer expectations from the fiscal services have caused providers across B2C and B2B to enhance the quality of their user experience and the rate at which they are able to deliver the services. The loss of the payment processing costs, increased customer expectations for user experience and the abridged regulatory barriers has helped flourish in this new generation of payments. Clients have become more willing to adopt new technologies and updated financial service providers during this pandemic. For example, Visa processed approximately 400 million extra contactless payments previous year. The number of Brits with a digital only bank increased by 23 percent in 2020. Getting consumers to adopt the old style providers has been very tough. Banks have spent many years constructing the customer relationships and delivering products and so they maintain strong levels of enduring trust with the consumers.
The tide is turning as FaaS reforms the way we think about the finance products we utilise. The force for this change comes from the providers delivering services which create a profit or the need for consumers which has never been met. The important one being the convenience of payments and with the digital payments suspected to hit $6.6 trillion in the year of 2021, a 40 per cent rise in just two years and this being the push. The pull is derived from the things which is highly necessary for the consumers. Both need to be created from a compelling reason for consumers to move or change providers or to sign up to a new services. It is clear that the consumers are in the driving seat. The adoption of new techs and process is faster in the clients’ audiences than that in the business audiences. Some of the new financial services offered to consumers will need to be extended to the SME sector. It is because of the customers now demand the same pace and User experience (UX) in their business transactions are used to be received in their personal finances. The techs like APIs and Open banking systems enable consumers to see the range of data form variety of providers in a single view and it will be an important differentiator.
Financial service providers composed to prosper will have a readiness to revolutionize, digitisation as part of their DNA, and a large customer base from which to mine user-generated data for produce and service development. Hence, Big Tech poses a noteworthy risks to both the big players and the emerging fintechs. Companies like Amazon, Google, and Facebook have billions of clients, and therefore have the rich reserve of data to encounter the existing big banks. The small players willing to form alliances in order to make up for the massive amount of investment required to construct the technological backbone which is necessary to remain competitive. Operational solidity is the major building block for the FaaS service success. Payment systems must be very highly scalable and frictionless. The ones can make sure that this system will have advantages as the demand for such service grows exponentially.
