One of the only constants in the world of business is the idea that change is inevitable. Seemingly immovable industries in the past have often seen fundamental shifts in how they operate and this idea is becoming even more pronounced as the digital revolution progresses. Amidst these changes, thought leaders from these industries have provided insights to help us make sense of shifts and to predict where we’re going next.
This has been the case with Philip Belamant, CEO of Zilch, the fast-growing UK-based buy now pay later (BNPL) provider. Read on for a look at the business leader’s recent thoughts on his sector and the digital field at large.
Zilch CEO Highlights Tech’s Influence On Banking
As the Zilch CEO notes, banking is one field that has seen an extremely pronounced paradigm shift in recent years. This is notable because, in the past, banks were often thought of as some of the most stable institutions in the larger economy. Their business models were often tried and true and some institutions had been around for more than 100 years. In short, banks were seen as a model for stability and perhaps seemed like an unlikely place for the digital revolution to make meaningful inroads.
This concept began to shift, however, in the wake of the 2008 financial crisis. During this time the idea that banks were “too big to fail” became challenged, as some of the most notable names in the field collapsed.
The instability in the space helped contribute to the idea that change was possible, and even necessary. It was an environment conducive to the emergence of new technologies and new concepts about how banking could take place. Much of this change has centered around the use of the internet and related technologies in ways that could benefit banking customers.
Emergence Of Open Banking
In his thought piece on overarching shifts in the field, Philip Belamant takes particular care to single out the role of technology in creating a host of benefits for banking customers. He points to the concept of open banking as an example of the types of shifts that are making a significant impact here.
The technology allows for easier access to financial records and credit histories. As a result, secure financial profiles can be created that can help institutions gain a better understanding of a consumer’s overall spending, saving, and repayment habits. This allows banks and other institutions to better tailor their services to the specific needs of individual customers.
This is especially relevant to the business model of Zilch, which was one of the first BNPL providers to adopt its usage. This allows the company to gain a better understanding of the needs of its customers and their ability to repay loans. With this clear view of consumer financial profiles, the company is able to be intentional with how much it lends to its customers, thereby ensuring it doesn’t lend out more than they can afford.
As the CEO notes, this approach is especially relevant for credit providers since there are so many different reasons a consumer might utilize their services. As such, there is no one approach the works for every lending case. In lieu of such an approach, a clear and accurate assessment of consumer habits empowers responsibility throughout the process and provides room for customer wellbeing as a central focus.
The Power Of Apps
In addition to his thoughts above, the CEO also took care to touch on the particular importance of apps in the present technological environment. It was once standard practice in the banking and credit industries to couple products with service agreements that amounted to pages of fine print that were often convoluted and heavy on legal language.
Such practices may have lessened the liability of the companies themselves but did little to create an open sharing of information between providers and consumers. This practice is changing, however, in part thanks to consumer demand for easier transactions and more accountability.
Belamant notes that one major driver in this area is demand by consumers to have a more continuous overview of their financial positions. However, consumers now additionally want tools that don’t just provide a simple account balance or financial statement, but also a host of personalized services. This includes features such as repayment alerts, instant payment notifications, and advance notifications regarding overdraft charges. This provides both convenience and a better relationship between financial institutions and users.
Zilch And The Importance Of Regulation
Lastly, the CEO touched on the importance of regulation in the financial revolution. As the 2008 financial crisis and other past downturns have highlighted, protecting consumers from volatility is an important focus for those wanting to create more fairness in finance. When it comes to lenders, this can include steps to protect customers through explicit commitments and affordability checks.
Much of this can be achieved through regulation of the field, which has been a central tenet of the work engaged in by Zilch. The desire to work with regulators to help protect consumers was one of the company’s early core value. This motivated it to develop its offerings through the FCA’s Sandbox Program, allowing it to test out its services with the agency and ensure its practices were in line with applicable standards.
The 12-month process resulted in the company becoming one of the first fully FCA-regulated BNPL providers in the UK. With the agency now announcing more robust requirements for participants in the BNPL sector, the company’s prior efforts help to showcase its commitment to leading its field and helping to move it forward.
The above overview of recent thoughts by Zilch CEO Philip Belamant goes a long way towards explaining the current state of fintech. While the financial industry has sometimes been thought of as slow-moving and largely static, the influence of technology has helped make significant changes to the space of late. The work of the BNPL provider stands out as an example of these changes, with its services helping to change the way we think about lending and other aspects of finance.
Moving forward, consider looking to the CEO and the company at large for additional insights into how the field can become even more focused on providing customers innovative services in a responsible and easy-to-use manner.
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