Removing barriers: A new path for fintech report

MagnaCarta and Klarna have released a new report, “Removing Barriers: A New Path for Fintech.”

A decade after the Great Recession, a lot has changed in the financial services industry. But a lot has also stayed the same. For example, excluding regulator-mandated bank bailouts, the ranking of the largest financial services institutions in Europe, the Middle East, and Africa remains roughly the same as it was before the recession.

Despite falling revenues and share prices between 2008 and 2010, the market capitalisation of global banks has increased by almost 50%. Trust in the banking industry has also recovered, with UK consumers trusting banks at the same level as high street retailers. The number of bank branches in Europe has fallen by a fifth and the number of banks by almost a quarter since 2008.

As banking declines, the number of emerging fintechs is swelling, with estimates ranging from 5,000 to 12,000. From mobile money providers in Africa to advanced payment services and banking challengers, fintech as a sector and mindset has proven it exists.

Moreover, it has proven that its customer-centric, data-driven operating model is more relevant than banks. It is a model that focuses on smooth customer experience over traditional industry channel or distribution metrics. Its success lies in enabling commerce in the broadest sense, rather than prioritizing product sales.

The advantages of fintech are already unquestionable. Its development will depend on its ability to respond to new technologies and regulations, and scale its business accordingly. Whether it is the line between data abuse and use, or how to scale its business, fintech will struggle to find answers just like banks. If it does not, the cornerstone of the path forward may quickly turn into a fatal obstacle.

The PDF version will be shared to the 199IT exchange group. If you want to support our development, please join us!