Fintech Vs Banking

Only 20% of financial technologies compete with banks

The Kpmg  experts point out that fintech cannot be considered to be disruptive in the verticals where they compete with the banks. The real enemy are the so-called Gafa.

Nowadays, traditional banks don’t look at fintech with skepticism. Now, they are not mistrust, now they look for synergies. Where there used to be doubts, today there are rounds of million-dollar financing and acquisitions.

Banks and fintech have learned that they need travel companions to climb. Only 20% of financial technology actually compete with banks. According to the same study, 48% of fintech offer services complementary to those which banking is offering. Also, another 32% are characterized by being collaborative (they offer their services to traditional banking institutions). In fact, the Kpmg experts consider that the real enemies of banking are the so-called Gafa.

The real competition of the banks are Google, Amazon, Facebook and Apple (GAFA)

The GAFA lean out into the world of financial services without the burden that their regulation  represent for the banks. The fact that some companies have a payment entity license will allow them to have access to the accounts of customers of financial institutions.

As a result, the digital business heavyweights will develop customized products and challenge the financial sector.

Friction points

The percentage of fintech that compete directly with banks is very low and, moreover, their offer is not really disruptive. For the most part, fintech offers complementary products aimed at customer segments historically neglected by banks.

This is the case in the area of transactional services and foreign exchange, which includes those companies that seek to avoid the costs derived from banking intermediation. Also in the means of payment segment, where fintech are gaining market share thanks to their zero-cost transfer strategy and the speed that characterises their processes.

Banks have realized that they need to streamline their processes and eliminate fees to prevent customers from migrating to other platforms and applications.