Fintech reaching for the gravy. Time for traditional Banking Businesses to “Cannibalize” some revenue streams?
Many industries have seen a dramatic change over the past decade. Innovation has eliminated certain incumbents, where others survived but dramatically needed to innovate traditional business models.
Fintech to wipe out banks!
We believe this to be complete hype. The banking landscape will experience a massive change but not a “Kodak” moment. To understand how Fintech innovation can change entire businesses, we should look at past disruptions and the reaction of incumbents.
Complete Wipeouts – Ostrich Management
Kodak– Did not see the Digital wave coming!
Nokia – Too little, too late and betting on the wrong horses.
Blockbuster – Did not want to invest $50 million in buying Netflix in 2000.
Borders Books – Did not believe in new technologies and started to focus on CD sales.
From Leaders to Forced Followers – Betting on regulation and politics to help
Many Industries got disrupted by a few startups, bringing better, cheaper and easier access to a service.
And here come the FINTECH disrupters, SUPER charged with $19 billion funding in 2015 and $15 billion by mid-August 2016.
Will they change the Banking Industry? You bet!
Zooming into the FX Business, there are many disrupters already “open for business, ” and nearly weekly, we see new entrances. Will they kill FX Franchises of banks? Certainly not. Will they nibble at FX profits of banks? They already do.
The question will be, if they can put a BIG dent into the traditional FX business of banks, the same way traditional Payment Service Providers, like Western Union, got their margins squeezed. There we see a very high possibility.
What is offered and what are the trends in the “Payments & Remittances” area?
Better Exchange Rates
Didn’t we just hear this before? Cheaper and easier access to a better service.
Having looked into many of these disrupters closer, spoken to many of them and done business with some, we will introduce our favorite 10 Fintech disrupters on the side of Currency Exchange, Settlement, P2P payments, and Robo Advisors. We will also explain why and where they will inflict significant pain to banks, especially to banks that keep ignoring this supercharged disruption. For some, a Kodak moment might even be in the cards.
Please stay tuned for our 2017 update.
Happy Holidays to all and a very happy and healthy New Year.
Urs Bernegger, CEO