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.