FinTech – The Not-Yet-Disrupting Disrupter

September 25, 2017

We saw that topics like Open Banking, RegTech, InsurTech, Chatbots, AI, Machine Learning, and PSD2 were eminently relevant this year in the FinTech scene. The interest in those rising matters has never been higher at this point.

Numerous created FinTech startups have rattled at the base of banks, insurances, and regulation institution with their vigorous focus on improved customer experience for financial services. Nevertheless, FinTech has not yet fundamentally disrupted the competitive landscape, but merely changed the environment of finance, insurance, and regulation. One main reason was the fact that customers did not jump on the newly provided services as quickly as expected which prevented FinTech startups from scaling accordingly.Regardless of the tenuous disruption of FinTech, it prepared the ground for more customer-centrist business models and made FinTech accessible to a broader audience beyond finance experts. We as consumers are more familiar with new technologies and enter a stage where we increasingly understand the different possibilities that will facilitate our everyday lives. Peer-to-peer transactions via Paypal, Twint, ApplePay or WeChat are as normal for us now as brushing our teeth – which none of us would have probably thought only 5 years ago. Consuming various financial services from different providers gives us the opportunity to make a financial decision more independently.FinTechs have fostered a fragmentation of the market place where banks shall no longer deliver all financial services. They are not the only specialists in banking, investments, and money business any more: FinTech startups specialize in crucial domains and empower us consumers to gain a deeper understanding of and participate more actively in our financial affairs. At the same time, we increasingly trust in our devices and let them make our decisions and let us have our financial information always at our disposition.Coupled with the EU’s amended payment services directive (PSD2), which forces banks to share their customer data, bigger players in FinTech now can further tackle a market that is still predominately occupied by established banks and insurances. As financial institutions feel compelled to reduce their cost base they are more likely to adopt new technologies and collaborate with new entrants to keep up with the pace suggested by FinTechs.In view of BigTechs like Facebook, Google and Amazon, smaller businesses and established financial institutions increasingly compete with their superior personalized and digital customer interactions. These current developments thus urge FinTechs and traditional firms to improve their user experience, especially in the areas of digital transactions, transparency, convenience, and proactive updates.We are excited to work on those challenges together with our future Batch III, which we currently recruit for our F10 P2 “Prototype to Product” Program starting in March 2018.

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