Organizations that use technology would be aware of the money that needs to be spent. After all, there is no free lunch. Paying money for value addition and savings is what companies expect. They also expect that the services would keep improving.
Companies need to work with banks and the reality is most banks are still in the 20th century when it comes to charging fees. It is important to be aware of the bank fees charged vis-à-vis the money spent on IT observed Bahaa Abdul Hussein.
Money spent on IT
Every company starts small, but then begins to scale up its operations. As new clients come in, new technologies need to be adopted. While this calls for investment, it is important to focus on the IT costs for the product.
A good company would ensure that the product IT costs do not change significantly. They would try to maintain a spread of around $1,500 from the most expensive to the least expensive months.
Bank spend
Companies are increasingly spending more as they increase the quantum of business they do with banks. The number of client transactions are increasing and all go through the bank. The amount of money that moves between accounts is also increasing. Considering the volume of transactions and money, it is logically to expect banks to give clients a break.
The reality is different. Banks are not changing their fee structures in line with operational realities. There are various fees that they charge to clients. From merchant fee to account fee, and plan fee to foreign transaction fee there are many charges levied by banks.
The result of this is that companies are spending more money on bank fees. An efficient company would manage to reduce its IT spend, but unfortunately the bank spend is not in its hands.
Companies are actually by helping banks by transferring more money to their accounts. This represents increased capital. The least the banks can do is to charge a flat fee from clients.
The role of fintech
Fintech is very clearly beneficial for companies as compared to banks because of their transparency. Fintech companies in the financial sector are clear about their pricing and strive to offer innovative products that meet customer needs.
The objective of fintech companies is not to squeeze money out of clients. They want to increase their customer base and then offer innovative products that meet client needs. This has made fintech gradually become an alternative to banks. It is time banks wake up or they would be left behind.
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