Consumer Fintech will be more profitable than banks. The disruption has already started in Brazil, it's coming to the US. Plus; $1trn reasons to love Stripe again and UK making faster payments slower
Hi Simon, fabulous read! Another set of data that is perhaps more difficult to quantify but very relevant is the impact of fintechs Alipay and WeChat on Banks in China. To say that banks were disrupted is an understatement! I wrote about this in my book Cashless a few years back. While banks were hit hard on loans and payments they are such large entities that they of course weren't going to fail. But yes the debate is over!
Loved the rant and the insights on how fintechs are encroaching on banks/ big banks deposit share. I do think the big banks are challenged by their focus on financials, which stymies innovation and distracts from focusing on the customer. They are also burdened with their legacy infrastructure and technology, which is costly and complicated to upgrade in order to compete with digital only banks or fintechs.
1. What role do you think trust will play in consumers moving deposits over to fintechs. Most fintechs don’t have FDIC insurance for deposits. Maybe most customers don’t think about this, but maybe it is more relevant now in light of the SVB failure
2. Do you see the rise of fintechs tends to consolidation amongst smaller banks/ community banks? These banks have fewer sticky deposits, so are more prone to disruption. Do you see deposits flowing from these smaller banks to the fintechs creating some sort of digital version of these community banks/ credit unions?
Another good post, as an engineer I especially enjoy the inclusion of the Boeing cultural war.
Crypto will disrupt banks. What a wonderful decentralized future will be!
Hi Simon, fabulous read! Another set of data that is perhaps more difficult to quantify but very relevant is the impact of fintechs Alipay and WeChat on Banks in China. To say that banks were disrupted is an understatement! I wrote about this in my book Cashless a few years back. While banks were hit hard on loans and payments they are such large entities that they of course weren't going to fail. But yes the debate is over!
Loved the rant and the insights on how fintechs are encroaching on banks/ big banks deposit share. I do think the big banks are challenged by their focus on financials, which stymies innovation and distracts from focusing on the customer. They are also burdened with their legacy infrastructure and technology, which is costly and complicated to upgrade in order to compete with digital only banks or fintechs.
2 questions:
1. What role do you think trust will play in consumers moving deposits over to fintechs. Most fintechs don’t have FDIC insurance for deposits. Maybe most customers don’t think about this, but maybe it is more relevant now in light of the SVB failure
2. Do you see the rise of fintechs tends to consolidation amongst smaller banks/ community banks? These banks have fewer sticky deposits, so are more prone to disruption. Do you see deposits flowing from these smaller banks to the fintechs creating some sort of digital version of these community banks/ credit unions?