Will Fintech Be The Future Of Banking?

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"Watch out, big banks. Silicon Valley is targeting finance as the next industry ripe for disruption."

Here is an interesting article that summarizes how tech companies have lately been pushing to enter the financial sector:

Apple (AAPL) is reportedly on the verge of launching a joint credit card with Goldman Sachs (GS) that would carry the Apple Pay brand. And Facebook (FB) just formed a team to explore the power of blockchain that could include creating its own cryptocurrency for payments.

Delving into finance can give tech firms valuable insight into what Americans are spending money on. That information can then be used to shape future business strategies and defend against threats.


"I don't see tech firms as an existential threat to the JPMorgan's of the world," said Elliott. "No matter how good their technology is, a fintech company can't overcome the cost of the new regulatory burden."

Instead of trying to compete directly, tech firms are expected to form alliances with banks that already have the required licenses and regulatory oversight.

Companies like Apple, Facebook and Amazon have been aggressively expanding into the financial sector by providing services such as credit cards and online banking. Some are even experimenting with blockchain/cryptocurrencies and AI (ex. using Alexa to make payments) to find new ways to "disrupt" consumer banking. While financial regulations remain an obstacle to the expansion of these companies, it suffices to say that the future of banking might look very different than banking today.

Do you think Fintech is the future of banking?

Do tech companies pose a threat to the banking industry?


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May 18, 2018
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