For a very long time German banks ignored the boom of emerging new competitors from the Internet. But now hardly a day passes without a credit institution entering into a new partnership, or new investment with one of the so-called FinTech, or financial technology, companies.
“2015 was the year of awakening for German banks,” says Peter Barkow, the founder of the management consultancy of the same name.
It was a paradigm shift that seemed sorely needed. These collaborations could prove crucial for the survival of banks. New ideas are everywhere in the world of finance. There are new services that simplify banking transactions. There are alternative sources of finance for companies and individuals. There is technology to replace bank tellers. In short, the entire value chain of financial institutions is in flux. The U.S. investment bank Goldman Sachs believes that the new competitors are set to challenge more established companies to the tune of $4.7 trillion in revenue and gains of $470 million over the next few years.