“I see FinTech (in its true meaning, Technology that will change the Finance Sector) as the most disruptive thing since the introduction of Credit Cards facing the Banking World. FinTech to me is about removing the ‘friction’ between consumers/customers and financial services, and remove friction between financial service organisations. I also see it as a big challenge to bank profits, and better value for money services to customers.
“The banking world has been closed for many reasons, but with the social and technical changes we are now embarking on, the industries barrier to entry are down for new FinTech startups. The real challenge will be regulatory and the Banking World will need to defend itself against the new kids on the block eating at the same, very rich table. Banks, I feel, will move quickly to acquire FinTech start ups as a defensive strategy. They do not like competition or threats to their current cosy business models, this will stifle innovation.
Banks have always been cautious when it comes to anything, let alone fast paced innovation or cultural change. They are not culturally receptive to it at board level. If banks do not get to understand the wants and expectation from today’s and tomorrows customers, then they will be taken by surprise.
In my experience banks are only taking interest in FinTech because it is the new thing, has possible cost reductions and hip to be there, when it should be about taking advantage of new thinking and new technology to build operational models for tomorrow’s consumers and financial institutions.
It just takes an Apple to announce it has opened a bank based on new FinTech and the banking world would be rocked. Already Facebook is making a play and has it’s first license in Ireland. Lets face it, PayDay loans have been around for almost a decade, and despite high charges, the convenience and speed mattered more to customers, yet no bank I know of has offered a similar solution. We only have mobile payments because Apple forced banks to follow suit. So why did banks not spot these market opportunities beforehand?
My biggest fear is that FinTech apps are developed with such speed that little attention is paid to Security and regulation like GDPR. There seems to be too much focus on a quick development and ‘ship it out fast’ culture. We have seen problems in the IoT world and FinTech is far more attractive to criminal hackers. Investors, customers and companies are going to get seriously burnt unless they wake up to this fact.