Big banks and fintech startups – friends, foes, or neither?
If 2016 was the year that big banks realised that challengers could be friends rather than foes, 2017 is the year that they’ll realise that they can cut them out entirely.
While the fintech startup industry continues to grow – with a frankly unsustainable 57 new banks supposedly on the way in the UK this year – there’s a growing trend among major retail banks to put some of their considerable resources towards providing a startup-like experience, without the messy business of actually being one.
The big bank’s little brother
One example is Spain’s ImaginBank, a new mobile-only offering from the local giant CaixaBank. Similar to startups such as MonzoBank and Tandem, you can join directly from a smartphone app – but unlike the challengers, it’s got the reassuring backing of a major financial institution.
And that’s the key for major banks entering the challenger space – their existing brand prestige and financial resources mean that consumers will likely feel more comfortable trusting them with their money compared to a relative unknown. If they can setup a service unhindered by their legacy systems and give themselves the aura of newness and modernity that the startups boast, there’s the potential for them to be a nightmare for the challengers.