What has Fintech Done for Us?
Fintech has attracted massive attention, due in part to the enormous sums sucked in via investors – over $100bn in the past three years, according to numbers from KPMG and CB insights. In spite of all the excitement and cash, and predictions of fintech companies routing the traditional banks, fintechs have failed to date in taking significant business from the incumbents: according to the Economist Intelligence Unit, fintech companies have grabbed just a 2% market share. It’s absolutely harder to disrupt financial services than people envisioned.
Banks retain many competitive advantages, as well as the capacity for innovation. However, writing off fintech would be premature.
The fintech revolution?
Banking is an enormous industry, with massive profits, over $1 trillion annually according to McKinsey(see below).
Fintech is also an industry where customer experience scores are low – fewer than 40% of retail customers recommend their bank, according to Capgemini.
Therefore, fintech is an industry that should attract lots of new entrants keen on offering better customer service at lower price points.
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