It’s the end of the bank as we know it

Published on
26 Jun 2015
Initial Author
Dirk Vonden

FinTechs are on the way to reshaping the financial services industry. Not only that they will foster all the ’D’-trends (digitization, disintermediation, disruption etc.). Also, they will facilitate a major change process regarding the way all market participants will operate — including traditional providers such as high-street banks, well-established asset & wealth managers and insurers.

Banking in the moonlight

It’s a customer needs game — who said that banking cannot be easy, convenient, 24/7, inexpensive or even fun? As in many other industries, fresh and carefree startups are building businesses around the customer’s true needs and are questioning established processes, communication channels, industry standards and fee structures. User experience is radically improved and sometimes completely abolished — e.g. in payments the best user experience is when there isn’t any.

How am I supposed to bank without you

It’s all about data — traditional bank processes, even advisory processes, are replaced by rapidly evolving technology. It’s just a question of time until behavioural data-driven algorithms produce superior investment or risk management decisions than their human counterparts for the vast majority of customers and use cases.

No bank, no cry

It’s not a trend or wave, it’s a fact — FinTechs will lead to susbtantial change, however banks and insurance companies with their huge customer base will not disappear at all. In order to stay on top of the game, traditional providers are already starting to embrace the inevitable change, to embrace FinTech startups (btw. without strangling them to death) e.g. through co-operation and to reinvent themselves.

The more comprehensive version of this article is going to provide deeper analysis on the key drivers for FinTechs’ success, elaborate on promising real-life and future business models and draw a more detailed picture of the future state of the financial services industry.