As big banks are very risk adverse and small/medium sized business are often seen as quite risky, they have had a history of difficulty when it comes to dealing with banks and lending. In today’s world, there is good news for SMBs, because thanks to fintech, there is more competition in lending for loans, payroll, etc. The dual benefit of more competition is that these new fintech companies have a huge market of SMBs that want to work with them, and at the same time the SMBs can benefit from the increased speed, security, and convenience that the fintech companies provide.
Considering the banking industry is an oligopoly ruled by a few players, I think the rise of fintech provides the industry with a lot of opportunity for improvement through the use of technology and innovation like algorithms and encryption that will both improve the kind of services offered and lower prices for financial services, because many more players can now enter the industry. The use of technology in IS brings the great benefit of lower costs and less barriers to entry, while also allowing new and customised services to be created on company-by-company basis to provide for greater financial information service.
https://smallbiztrends.com/2017/01/fintech-trends.html
Your mention of how Fintechs offer opportunities for improvement in the industry touches upon an interesting cross point between banks and Fintechs. I think it raises the discussion of how Fintech startups will force banks to change their business models and approach towards consumers. It will be interesting to see how banks adjust and how much financial technology innovation they create versus upcoming startups.
I agree with the idea that Fintech startups will begin to force traditional banks to make strategic moves in their business models, so that they also integrate technology and innovation. Due to this fact, we will surely see competition between the tech innovation by the startups compared to what the banks do in response. I feel that the banks will copy certain technological integration that the startups are using in the beginning, but due to their large size and foothold, will be able to offer Fintech at a much larger scale than startups will initially be able to do.