Fintechs and Banks

Cooperate or Flop

fintech_Mario Andreya-Deutsche Bank AG
Cooperating is the new disrupting.
  • Why it matters

    Why it matters

    As the fintech industry starts to consolidate, there are signs that the firms which cooperate with banks are more likely to survive than those seeking to disrupt the status quo.

  • Facts


    • Investments in fintechs that cooperate with banks increased by 138 percent last year, compared to only 25 percent for fintechs that attack banks.
    • Cooperating fintechs are in the majority in New York, while attackers make up 90 percent in Great Britain.
    • Germany is a difficult market for fintechs focusing on payment transactions as many bank customers are satisfied with conventional modes of payment.
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Of course some financial technology companies tower over banks. Take Paypal, for example, or its Chinese competitor Ant Financial (“Alipay”), which is reportedly now worth $60 billion, or €52.7 billion.

But most new financial technology companies, or fintechs, undertaking a David vs. Goliath fight in the banking world are unlikely to win. Experts have one piece of advice for fintechs: cooperate with their established banking rivals – or go belly up.

Financial startups are attacking banks, offering fast lending, simple payment methods and automatic asset management. But, so far, there has been no indication that they can steal many of the banks’ customers or even pose a serious threat.

Partly, that is because it is hard for the newcomers to establish themselves as a brand. Meanwhile, banks have become more attentive and are quick to copy promising ideas. Moreover, complex regulations often hamper fintechs.

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