Banks have learned that when it comes to fintech, if you can't beat them, join them, says Chris Skinner.
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Fintech companies are an odd mix of 'boomers' that tend to have the financial knowledge, and 'millennials' that bring the technological expertise. The success of such a company, however, seems to depend on how the two mix.
Techfin or fintech? Incumbent banks think in terms of the former – applying technology to the financial process – while for start-ups it's the latter, in that they take the financial process and apply technology. It is a subtle difference, but an important one, says Chris Skinner.
As identities increasingly move online, the 'bank account' will eventually become a place where virtual money is kept in a digital 'bucket' with access allowed to trusted parties.
Layers of resistance, from hard-to-update legacy systems to hard-to-break user habits, make the timeline for seeing a new technological innovation hit the mainstream surprisingly long.
With a global majority preferring digital access to banking, the cost of serving a dwindling number of customers through expensive analogue channels is growing, something that will eventually lead to banks disposing of these channels altogether.
Will banking be disrupted by digitalisation to the extent that music and entertainment have? Not quite, thanks to the tight regulation those operating within financial markets have to adhere to.