Bank disruption: a perfect storm?
Our fourth report of the Mapa Insight Series is the first dedicated report looking at disruptors within the financial services space. A recent report not only found that global investment in fintech has tripled in 5 years to $3 billion, but that 35% of banks’ income will be at risk in 2020 from the emergence of these disruptors. There is on-going debate surrounding the actual threat disruptors pose to banks, and to what extent they will become the next “Amazon” and lead to the demise of the traditional bank.
We explore why the market is ripe for disruption, in particular how consumer expectations around digital services are changing, why banks are limited in their ability to adapt to these expectations, and the price barrier they face as a result of a multi-channel offering. The bulk of the report is a deep dive of 13 disruptors – from pure-play FinTech companies to dedicated banking services from the likes of Google and Facebook.
A few of the Disruptors we promote include:
Selected key takeaways from the report:
Digital only banks
Digital-only banking services are going to be mainstream banking for the next generation. They have a benefit of being built from scratch. As they do not have to support the brick and mortar systems, they are able to offer better pricing for the end customer, despite currently lacking economies of scale that the incumbents possess. When the online community-focused and customer-centric digital banks achieve a sizeable customer base, their exponential growth will threaten the existence of the currently traditional retail banking model.
Examples featured in the report include:
- How Fidor Bank embraces outside innovation with its API infrastructure
- The end to end payment process for Transferwise and the unbank-like jargon used
- Setting up a Nutmeg investment portfolio in minutes via desktop and the subsequent online platform
- An analysis of the newly launched Facebook payments and its future potential
- How Revolut has developed a seamless mobile wallet with a beautiful UX
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