Incumbent banks are losing. It’s no secret that challenger banks are taking advantage of the opportunities that incumbents have left on the table. But what if that could change?

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Blind as a bank

Banks wear blinders, they have to. Had to. It was the only way they could focus on getting the job done and keeping the lights on. That coupled with a never-ending river of compliance measures meant that banks went from lean, mean powerhouses to bloated machinery, and that bloat never quite went away. The big banks are Goliath, run to fat.

That’s why the fintechs could act. They noticed the opportunities left on the table by incumbents as technology developed and they swooped in to take full advantage of the situation. …

It’s been an incredible year for fintech, but one thing’s for sure. 2019 is going to be an even wilder ride.

Open banking and PSD2 have been underwhelming in terms of impact in 2018 and that’s likely to continue over to 2019. The banks are only just starting to properly open themselves out. The challenger brands like Revolut, Monzo and N26 have the ability to completely allow for Open Banking built into their systems. So there’s a real possibility that within a retail and business context challengers may end up leading the way and leave the incumbents lagging behind.

Incumbent banks will still be wondering how to become compliant with regulation, whilst challengers are already able to be compliant. Fintechs will focus on maximising the opportunities that come with it and enter markets faster. …


David M. Brear

CEO of 11FS who are changing FS for the better, Host of podcast FinTech Insider - Always falling forwards. DMs

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