Who do you trust: fintech vs. incumbent

Displayed intentions and clarity of vision matter a lot

This has been discussed a lot I feel I can provide my perspective while fintech momentum at least for now is more powerful than the one projected by banks as a retaliatory rhetoric.

  • Simplicity: fintechs start with MVP to test the idea overall attractiveness and, being limited in resources, they try to do that in the most lean and cost effective way possible: creating initial stickiness and traction is their first good aim. Ability to prove a poignant view is limited by resource — and it distills and crystallises the approach, and in doing so they serve a great purpose to startups: it build rails for viral growth. Banks innovation effort is often starts at the top and / or close to the IT function — where flooding projects with resources is the epitome of corporate survaval and internal corporate struggle for power.
  • Intrinsic motivation: startup ideas are born as a result of a personal story: hence they have a social dimension that adds to the stickiness, it has purpose and so is harder to dispel. Corporate stories are often picked up and inflated, utilised as a cudgel to balance out the corporate struggle and so they prove to be more fickle and less prone to stand the test of time
  • Legacy and philosophy: startups reimagine the whole stack of how the service should be offered, not that it has to be only rendered into digital form.
  • Risk attitude: where startups try to risk capital to learn from the experience (and the feedback), banks often start a conversation about a new project with a model on how they would need to make to start the project in the first place. Different risk attitude brings two different outcomes.

Overall, the talk about why people trust fintechs more than they do banks has a simple explanation. Fintechs sound and behave naturally in the digital world. They represent the today world and connect with the users, while banks often tried to adapt the world to their reality — or at least only imitated they are moving towards it.