Is FinTech improving or threatening the basic business of traditional banks. Market participants undoubtedly have various views.
Some believe that the biggest challenge from FinTech firms comes from those that provide “robo-advice and peer-to-peer lending”, which challenge banking’s historic strangle hold on saving, investing, and borrowing.
Others want to bring the technology that major institutions are using, and make that available to retail investors, reducing fees and commissions.
However, many believe banks will remain at the center of the financial industry, competing and even partnering with new participants in the advance to digital services. The growth rate in FinTech may be a multiple of what is experienced by traditional banking, but maturity within FinTech should eventually narrow that gap while banks continue to take meaningful advances in digital services.
In addition, while regulators may be behind the curve in addressing issues related to FinTech, they are likely to play catch-up and could set rules that benefit bigger and better capitalized institutions.