Redefining Finance: A Journey Since The Financial Crisis

The right moment for fintech and challenger banks

Since I graduated (at the height of the financial crisis) I asked myself why finance could not change quickly so as to reflect the demand of the public and fit the values of its customers?

It took me few years to witness the slow and gradual change that was taking place to the point that today I find myself in the heart of it, allowing me to answer this question.

The great news is that the movement that will re-shape banking is picking up speed and will soon change the way customers perceive financial institutions.

Indeed, barriers to entry to accessing the banking sector in the UK have been lowered. This enables new entrants with disruptive business models and innovative technologies to enter the market and serve their niche market. The stated objective is to bring customers back at the heart of banking, but this time this won’t be with a one-size-fit-all approach. Challenger banks will be “banking on you” using your characteristics and behaviour patterns to deliver great products that will bring value to customers.

This approach to business may seem normal in other sectors, with start-ups creating services and products that match customers’ habits and enhance their daily life. Yet, banking remains one of the few, if not the only, sector that was not yet tackled by start-ups.

The reasons for this are diverse. First, banking is a highly regulated environment limiting the quick arrival of new players. Secondly, traditional banks are faced with legacies and corporate structures that prevent adaptability and responsiveness. Finally, IT providers offer products at a price that could only make banking profitable if applied on a large scale.

However, as regulators opened up the market and IT banking products being increasingly commoditised, the capacity of challenger banks or FinTech start-ups to enter the market is increased. The corporate structure of larger banks is changing, but this is a slow process akin to trying to change the course of a tanker ship.

To the sector that I am involved in, this means that challenger banks and FinTech start-ups have a unique opportunity to establish themselves in this market before large players are able to overcome their legacy system. To customers, this means that soon you will be able to choose with who you bank without compromising values or lifestyle.

I took 6 years following the financial crisis for things to change but dots are lining up and everyone should expect to witness disruptive new entrants that will redefine how banking should be done.

I belong to a unique generation that witnessed the effect of the financial crisis and has also the dynamism to provide not only the answer, but shape and design the solution to make finance different.

Let’s redefine finance!