When speaking to the Daily Telegraph, Revolut CEO Nikolay Storonsky declared “I’ve never seen a big bank do something cool – if they did we wouldn’t exist.” It’s a commonly-held view that banks and fintechs are at odds and that innovation from new companies like challenger banks pose a threat to incumbents.
However, this isn’t necessarily the case. Many large banks are engaging with fintechs to increase their capacity to innovate, whether through partnerships or accelerator programs. It’s not that banks don’t do “cool” things, but their size and the regulatory environment in which they operate can hinder their ability to move quickly. New fintechs therefore present a great opportunity for banks to accelerate their level of innovation faster than they could internally.
According to Peter Wong, deputy chairman and chief executive at HSBC Asia-Pacific: “Fintech complements rather than threatens banking institutions. In my experience, banking has always been about technology, so today’s fintech innovation boom represents evolution rather than revolution for traditional banking.” And it’s not just the new fintechs that are innovating the way people engage with banking:
- UBS and DBS have both introduced robo-advisers to provide real-time portfolio analytics services on a personalized basis to their high-net-worth clients.
- US Bank is using the IoT to offer light bulbs that flash when something is happening in your account.
- Many banks such as RBC, HBOS, Heritage Bank and Barclays are offering biometric trackers and wearables for making contactless payments.
- Banks now understand that they have to engage with their customers 24/7, and many can now connect with their clients via the media of their choice - whether it’s WeChat, Facebook Messenger, Google Hangouts, Whatsapp or others.
There are so many other examples of interesting and innovative things that banks are producing, both independently and in partnership with new fintech companies, on top of the compulsory changes they need to make to satisfy regulators.
At Cutover, we have worked with banks to support their agility and reduce risk in some of their largest challenges, such as ring-fencing or completely re-platforming their credit card businesses to give customers more value. By using Cutover to implement these complex change events, banks are able to better orchestrate and manage the change.
Better than anyone Cutover structures disparate data and then enables humans and technology to collaborate at pace. Request a demo to see it in action for yourself.