According to a new report on the British banking industry, Fintech startups are the major potential destroyers of the traditional financial system.
In the Bank report entitled MoneyLive, compiled company Marketforce LIVE, it is said that the British banking sector sees in these startups a "significant threat" to the traditional business models. The document was created on the basis of six hundred consultations undertaken by Marketforce LIVE from various industry representatives.
The report contains the results of surveys of respondents who shared their opinions about how traditional financial institutions view the services of Fintech companies and how they influence available to the banks client base and future business prospects.
According to the document, 81% of respondents believe that the customer experience and service quality more effectively attract and retain customers than the credibility of the largest institutional brands. About 79% of UK banks believe that Fintech startups have "a more attractive brands".
It is noteworthy that 59% of respondents fear extruding from the market by Fintech companies, or at least the appearance of "significant threat" to the relations of banks with clients in the absence of changes in business models in the near future.
The report stated:
"59% of respondents believe that new intermediaries are a threat to their relationship with their customers. All stories with digital violators of the established order — from Amazon and Netflix to Airbnb and Uber — has always ended badly for those who have not given due importance with a personalized experience and reduce costs".
71% of respondents stated that banks are not able to meet the clients ' priorities with regard to speed, simplicity and convenience. However, the report does not indicate what will happen with banking services after Fintech companies reached the assumed critical mass. According to 31% of respondents, the maximum benefit from the changes will get the online banks, and 30% of respondents believe that Fintech companies will completely replace traditional banks.
Given the growing and unstoppable adoption of Fintech companies over the medium to long term future, 93% of respondents stated that their business models need to fundamental changes that must be implemented within the next 5 years. Otherwise they will not be able to carry out their work in parallel with Fintech companies.