Traditional retail banks must find ways to collaborate with fintech start-ups and integrate fintech offerings into their services to remain relevant to customers, according to a new Efma Digest.
Packed with insight from experts and case studies from pioneering banks, the Fintech: reinventing banking report explores different types of fintechs, from those focused on delivering a specific product or service, to those that are adopting a ‘bank-lite’ model based around a prepaid debit card linked to a mobile app. It also outlines how their ability to quickly create new digital services and customer experiences is providing a viable and attractive alternative to conventional banks worldwide.
According to the Efma Digest, there will be close to US $100 billion invested in fintech in 2016 and there are already close to 20,000 fintech start-ups worldwide, including 50 fintech unicorns.
“We’re yet to see which type of approach will prove the most fruitful, but industry experts are unanimous in their belief that those banks which bury their heads in the sand and fail to acknowledge the impact of fintechs are putting their entire business at risk,” said Vincent Bastid, Efma CEO.
However, the Efma Digest advises that banks who find ways to combine their extensive expertise, large customer base and hard-earned consumer trust with the fintech’s agile business models will remain relevant in the digital world. These banks will also be able to overcome challenges posed by strict regulatory frameworks and siloed legacy IT infrastructures.
A recent Efma survey found that almost 86% of banks expect to increase their involvement with start-ups in the digital marketing space, while 78% aim to do so in payments.
Meanwhile, Andres Wolberg-Stok, Citi’s global head of emerging platforms and services, advocates fintegration, where banks learn to integrate the best fintech offerings into their own services.
In addition, the Efma Digest contains expert opinion from other key industry players, including Nadav Yur, head of business development at eToro; Heather Cox, CEO of Citi FinTech; and Philippe Poirot, director of digital development, transformation and quality at Groupe BPCE. It also features insight from Olivier Peeters, innovation advisor at BNP Paribas Fortis; Jim Marous, co-publisher of The Financial Brand; Brett King, renowned futurist and CEO of mobile bank Moven; and Chris Skinner, bestselling author, independent financial markets commentator and chair of the European networking forum the Financial Services Club.
“Our Efma Digest brings together a wide range of insight, opinions and case studies to illustrate the full depth and breadth of the fintech challenge today,” said Bastid. “We question which types of fintechs are posing the biggest threats and we find out how pioneering banks are leading the way with effective solutions.”
Fintech: reinventing banking is the first in a new Efma Digest series, and will be freely available to the public. All future publications in the series will be exclusively for Efma members.
The Efma Digest can be downloaded from here.