Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

STRUGGLES OF TRADITIONAL BANKS HIGHLIGHT THE WINNING PRINCIPLE AT THE HEART OF FINTECH INNOVATIONS

FinTech services are creating problems for big banks with a revolutionary consumer-centric offering

Dan Wagner - CEO Powa Technologies
Dan Wagner – CEO Powa Technologies

As banks embark on their reporting season, the traditional institutions are setting out how they have fared in a tough global environment. Credit Suisse are due to release year on year results on Thursday, which are expected to show that the restructuring undertaken by the Swiss bank has not yet fed into their share price. Last week’s report from Deutsche Bank showed their first full year loss since the financial crisis of 2008, attributed by their CEO to on-going legacy issues.[1] It is clear that traditional banks are feeling the pressure from the disruptive impact of FinTech innovators.

These pressures are highlighted particularly in the retail sector, with those banks with high exposure to customers experiencing profound disruption from FinTech competitors. A report by PwC highlights that 55 per cent of bank executives believe that non-traditional players pose a threat to traditional banks. The report identifies the development of a customer-centric business model as the highest priority for banks if they are to remain competitive over the next 5 years.[2]

Technological innovators such as TransferWise, Nutmeg and Funding Circle are increasingly fragmenting the market by unbundling financial services to create an agile offering. They are disturbing the established order by leading with customer focused innovation. This characteristic is at the heart of the battle between the FinTech sector and traditional banks.

Dan Wagner, Founder and CEO Powa Technologies, comments: “FinTech companies have recognised the value of offering a completely new proposition to consumers. In contrast to their traditional competitors, many of them giant and overreaching, successful Fintech start-ups are specialising in just one or two aspects of financial services. They remain agile and responsive to customers, tailored specifically for the age of the ‘digital native’.

“Over the past few years we’ve seen the rise of mobile banking, particular in the U.S. where it exceeded physical banking in 2015. There are predictions that 81 per cent of Americans will do their banking on their smartphone by 2020, with the popularity of the service not just limited to the States.[3]

“In the case of mobile banking, the path to ubiquity has been paved by the availability of this service ‘anytime, anywhere’. This is the message that users of FinTech products are sending loud and clear to banks: convenience has never been a higher priority for customers. Traditional banks will continue to struggle if they fail to meet consumer needs in this area.”