Does the future lie with FinTechs or incumbents?

  • 5 February 2019
  • Blog | Fintech and Innovation in Banking

Read a range of opinions on the question of whether the future of banking lies with FinTechs or incumbents. Join the debate on social.

Chartered Banker magazine posed this question to a series of financial industry professionals and was inundated with replies. We’ve picked out a selection of insightful comments below:

Michal Gromek, a FinTech expert at the Stockholm School of Economics, Forbes Magazine contributor and author of the Stockholm FinTech Report
“The future isn't black or white and unfortunately – doesn't lie with either FinTech or Incumbents. It lies in seeing the urgency of co-operation needed today and learning how to facilitate effective communication between both of them. FinTech companies haven’t yet served 'cash cows segments' (such as mortgages, corporate services or trading) of the banks on a large scale. 

Josh Bottomley, Global Head of Digital, Data and Development, HSBC
“Historically, the relationships between emerging FinTechs and the established banking industry have been portrayed as combative. In reality, incumbent banks and FinTechs are entering mutually beneficial partnerships.

“I believe the future of banking will be for banks and FinTech start-ups to work together in an ecosystem, sharing their complementary strengths and overcoming the challenges that individually they each face.”

Mark Mullen, Chief Executive of challenger bank, Atom Bank
“The future lies with brands that offer customers better products and better experiences.   Technology is an enabler, but when it comes to financial services, it’s rarely, if ever, an end unto itself. 

Using technology to make banking smarter, easier, more reliable and more secure provides new brands with opportunities to challenge and disrupt – but it doesn’t guarantee success. Most innovations can be copied, and the speed at which they can be copied is accelerating. So all banks, and for that matter all companies, need to invest in innovation. This means investment in R&D, in culture, in process and in people.”

Tom Graham, lead for Accenture Fintech Innovation Lab London
“The future market is mixed. It will likely see a small number of FinTech brands emerge that have been able to scale, generate revenues and complete with incumbent players. It will also belong to banks that can use their existing scale to build new sources of growth, including finding opportunities beyond traditional financial services. 

Banks that are making strategic alliances with FinTechs and the tech ecosystem around them will emerge as winners. If they don’t, ‘big tech’ retail players will continue to nibble away at existing sources of banking revenue and reduce the relevance of traditional players to customers.”

Simon Thompson, CEO, Chartered Banker Institute
“If you’ll excuse the pun, it’s not a binary choice. Incumbents are already some of the largest FinTechs, utilising FinTech ideas and ethos to serve customers better. FinTechs are trying to scale,  or partner with incumbents, to better reach a larger market. And incumbent tech firms are offering an ever-wider array of financial services. Choice is good for customers - the future belongs  to them.”

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