Close

Choose a country

United KingdomEnglish
South AfricaEnglish
IndiaEnglish
InternationalEnglish

Can banks react quickly enough to the next phase of the fintech revolution?

Blog
28th November 2017

I have blogged recently about the changing banking and financial services industry, particularly the need for large incumbent traditional banks to offer more innovative services that can rival those designed by the new Fintech (Financial Technology) solution providers. The issue at the heart of this debate is that the new players can design services from the ground up, ensuring that the customer is at the heart of the product. That’s difficult for the large companies to challenge, but this is a question of survival.

One major advantage the big banks have always had is that their customer base has been built up over many years. Banks are traditionally seen as the providers of financial services and they are trusted to do so because regulators control how they behave – most of the time. Banks have a large legacy of branding and trust and with millions of existing customers it is difficult for the Fintechs to break in despite offering a better service and price in many cases.

But I saw a survey from the US this week that highlights how this traditional resistance to change might be breaking down. 60% of American customers said that they would be willing to try a financial product from a technology company they already use. That doesn’t help the small startup with a great idea, but it does create a major concern for the banks because this means that customers trust Apple, Amazon, and Google enough to take out a loan or get a credit card from one of these companies.

In theory there is nothing to stop Amazon hunting down a small, but exciting and innovative online bank, purchasing the company and rebranding their services as Amazon. With an enormous loyalty club globally (Amazon Prime) they could market financial services to millions of potential customers very easily.

This breaks down the traditional defence of the banks, that you can’t trust small unknown startup companies with your finances. The next wave of competition for the banks may in fact be the Silicon Valley tech giants – a path that Apple has already started on with their Apple Pay system.

With a growing acceptance of Blockchain technologies and virtual currencies such as Bitcoin, perhaps there is even a challenge to currencies themselves? With billions of users, what would happen to traditional banking if Facebook created a virtual currency – Facebook Dollars – and a banking system that allowed free, instant transfers between Facebook users, and small loans and other credit facilities?

The growth of Fintech has been talked about for several years and the focus on customer-centric design was always the big advantage of the new companies, but if they start connecting to major international tech giants then we could see a banking revolution inside the next five years.

What do you think will happen next and can the banks react in time? Let me know what you think by leaving a comment here, or get in touch on LinkedIn.


David Turner
Article by: David Turner

News & Insights

Webhelp Payment Services
Solution Designer
Service Provider
Technology Enabler
Blog
Meet our Advisors – Jennifer from Germany (ep.2)

An emotional elderly customer called our Helpdesk/ Customer Support. The recent passing of his wife and the lack of visitors due to the lockdown had him feeling very lonely. So, he tried to scan and print his old slides to create a photo album of all his happy memories to feel a little closer to his family. He had technical troubles and called up rather upset. First, I comforted him and...

Read 212CAAF2-CC0E-4D90-9134-028C45BDF837 Created with sketchtool.
News
Press Release: Jean-Baptiste Decaix appointed Chief Client Officer of the Webhelp Group, member of the Executive Committee.

Paris, June 22th 2020. With the appointment of Jean-Baptiste Decaix as Group Chief Client Officer, Webhelp reinforces its international senior management and reaffirms its ambition to become a top 3 worldwide leader. A graduate of CentraleSupélec and an executive MBA from ESSEC-Mannheim,...

Read 212CAAF2-CC0E-4D90-9134-028C45BDF837 Created with sketchtool.
News
Jean-Baptiste Decaix appointed Chief Client Officer of the Webhelp Group, member of the Executive Committee.

Paris, June 22th 2020. With the appointment of Jean-Baptiste Decaix as Group Chief Client Officer, Webhelp reinforces its international senior management and reaffirms its ambition to become a top 3 worldwide leader. A graduate of CentraleSupélec and an executive MBA from ESSEC-Mannheim,...

Read 212CAAF2-CC0E-4D90-9134-028C45BDF837 Created with sketchtool.
Whitepaper
The Summer of B2B Marketplaces

Following our last two studies “2017 - The spring of B2B Marketplaces” and “2018 - B2B marketplaces are blossoming”, we once again joined forces with the strategy consulting firm Roland Berger and with Mirakl to take stock of this new year of development for B2B marketplaces. This...

Read 212CAAF2-CC0E-4D90-9134-028C45BDF837 Created with sketchtool.
Case Studies
[Fashion] Fifty Jeans – Launch your brand without cashflow problems!

...

Read 212CAAF2-CC0E-4D90-9134-028C45BDF837 Created with sketchtool.
×

Webhelp Cookies Preference Centre

Strictly Necessary Cookies
The website requires the use of cookies for essential functional requirements and these are outlined in the cookies policy.

Enhanced Functional Cookies
Some features of this website use services provided by third parties websites. These features use cookies to implement their services on this website and may collect data about your visit to help them optimize their functionality. The Webhelp cookies policy outlines the cookies used by these services.

We have links to social networking such as Twitter, Facebook and LinkedIn.
These websites are third party sites. We do not place cookies on their behalf, and do not have control over the way they collect or use your data.
We encourage you to read more about their policies:
Twitter
LinkedIn
Facebook