Battle of the Banks: How FinTech is Disrupting the Financial Industry

Over the last few years, I’ve been heavily involved working with clients in the financial sector, and have learned a lot about the in’s-and-out’s of the industry. Now, every single day, FinTech startups – companies that are innovating the financial industry through technology – are popping up everywhere and disrupting the banking scene. Some call it the “unbundling of banking,”” while others call it “product-by-product battles”.

Regardless, “90% of bankers project that Fintech will have a significant impact on the future landscape of banking.” If the bankers think it, then we’re bound to see major changes in the financial industry this year. Here’s what some of that might look like:


Financial institutions are having a difficult time luring in new talent who can help banks innovate their technology systems. The Economist Intelligence Unit’s research on FinTechs found that banks admit to their own culture to be “unsuited to rapid change and an inability to attract top technological talent.” Because banks tend to be more risk-averse, “they do not attract the right talent.”

To solve the situation, top financial institutions such as JP Morgan are actively partnering with up-and-coming FinTech companies. These partnerships will pave the way for the next generation of FinTech innovation, becoming a win-win for both sides: Startups get incubators – such as the Citi Mobile Challenge and FinLabs – and established institutions reap the benefits of supporting innovations, especially when it comes to improving their payments and lending services.

Mobile Banks + Mobile Wallets = 0 Lines

I’m a fan of convenience. I’ve been using Starbuck’s mobile ordering offering since its debut. I sit at my office, order a drink, walk downstairs, and pick it up. No waiting in line or fiddling with my wallet.

This experience will become commonplace, and a solid companion to delivery services like Postmates and Caviar. What makes all this work are the innovations in payment services. In a recent study at EY, “the way we pay for goods and services, transfer money between accounts and send it overseas” are the most common and quickly adopted uses of FinTech services.

At the rate business is done these days, merchants no longer afford to have customers stand in line at the cash register (and we don’t have the time either). If businesses plan to stay afloat, they will have to recognize the benefits of mobile payment services – more correct orders, lower need for POS staffing, and higher order values with heightened awareness of product offerings. And as businesses increasingly follow this trend, we’ll less likely find ourselves waiting in line for the ATM in 2016.

The Blockchain

Perhaps the most powerful but least commonly discussed disruption in the financial industry is the blockchain. Wall Street is full of middlemen who get paid to reduce and manage risk between settlement windows when trading. But with Nasdaq’s recent partnership with to pilot Bitcoin technology, the blockchain will not only reduce the settlement windows from a matter of days to mere minutes, it will also reduce the risk, the middlemen who come along with it, and improve transparency in the process. It’ll be interesting to see how this will transform Wall Street and its relationships with rising FinTech companies.

Large financial institutions can no longer afford to ignore the rise of FinTech. Banks are collaborating and Wall Street is getting slow. Let’s pay for food from our couches and watch the show.