Banks vs Fin-Tech Start-Ups and the Digital Transformation Race

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22 October 2014


  • Juan, Excelente review.

    We not olny have to think about this fin-tech startups as a threat to finantial traditional industry (or if you want to see this new players from the customer side, as a leverage for customer experience), huge companies such as Google or Facebook can make the retail banking upside down.


  • Your thoughts are odd given that banks have been digital for several decades. You may mean that Banks are not embracing new channels. Again not earth shattering given they have legacy customers transacting on these platforms.

  • Banks however have the established compliance piece in place to leverage against enhancing customer relationships as well as some emerging opportunities in the financial world, example the Jobs Act which, when implemented in force by the SEC for the general public will require a robust need for authentication of potential participants on the equity side. Branch infrastructure, for example, will be a great way to facilitate obtaining market share for this opportunity if considerable resources are dedicated to driving and funneling customer attraction via that channel to meet that compliance. With that however is the understanding that this can back-fire if too much exposure occurs (into new innovation), as banks have the resources to compensate for any negligence, losses, risks, and general negative impact against the customer base. Too much too soon is a valid concern. I would say however Banks need to adopt a culture and put actual bodies unaligned to current banking channels and primarily focused for innovation with a more ‘start-up’ perspective. Once a valid business case has been validated, leveraging the rest of the bank in a cross-functional manner could reap extreme scale as if it were simply a FinTech going to market without those existing relationships and stakeholders, focused for centralized profitable.
    In alignment to the article, it appears banks can leverage current existing infrastructures & resources for competitive advantage that the FinTechs cannot. BBVA's acquisition of Simple is a valid approach to capturing innovation and leveraging it across its customer base, integrated into its internal core processes. I would not agree that this task is so daunting for banks if they truly understanding how they are much more capable than FinTechs, however as time has proven innovation has consistently come out of necessity and scarcity of resources, which in itself is added value.

    Many thanks,


  • Thanks for your comment Emiliano. Adding to your point about big players from outside the industry, it just makes the scenario even more daunting. In history, industries that have been disrupted have started by denial ("This will not happen to me", "these are not really competitors", etc...) to see them turned upside down at the end. I believe that in every challenge there is an opportunity, but it all starts with accepting the challenge. After that, the road only gets bumpier, but what a lot of fun!

    I know about the excelent initiatives at Banco Galicia with Eminent and Move; congratulations on those!

  • Thanks for your comment Arthur. I totally agree. What I indicate as daunting is the scenario where banks relinquish to interacting directly with the customer in a digital environment that is today better understood by fintech start-ups and non traditional players than by banks (in average).

  • Thanks for your comment Bee. They may seem odd, but I am looking to the banking that is ahead, not the banking as we know it. I am looking to new players such as Apple in payments, or Moven and Simple providing a better banking experience. I am looking to fin-tech start-ups that hook into the Open APIs banks are providing and come with much better ideas and use of the existing information. Digital is not just about channels but also about customer interaction, customer experience. Why banks can't do what those start-ups can? What will banks loose if they do not jump into the digital transformation race with all they have? I do not want banks to dissapear; I expect this to be a wake up call. I also expect to see another way of banking.