Traditional brick & mortar banks have never really recovered from the major set back they received after the financial crisis of 2008. Consumers have long been sick of the high fees, inflexible timings, narrow range products & business entities who never really had their interest at heart. The only thing traditional banks worry about is making money & being profitable. They got away with this for decades since people didn’t have any other choice. All that is changing with the massive digital transformation.
Whatever little bit of respect was left for the banks was squashed after the 2008 financial meltdown. A new crop of market entrants in the form of Fintech startups started to emerge post this era who took the popular customer-centric approach with the integration of disruptive technology, and more importantly targeting the unbanked & underserved who always felt left out by the traditional banks. And the results have been astounding. According to a recent report from CBINSIGHTS, these Fintech companies have raised over $1.7B in venture capital this year alone. At the time of publishing this report, these startups had more than 15M+ users and they are seeing exponential growth.
The growth of these Fintechs is being spurred by favorable tech regulation, massive mobile adoption & shifting demographics to Millenials but they still have to go a long way to uproot the hegemony of the traditional banks who are playing a catch-up game with massive spending on their technological upgrades & better customer experience. They do have an edge with an established infrastructure & huge clientele’. The biggest challenge for the Fintechs going forward would be on how they can monetize from the low-income customers that they are currently attracting.
Following is an infographic which shows the Fintech startups emerging in this arena & how they are disrupting the banking industry around the Globe followed by the details of a few star performers & what they are trying to achieve.