This article talks about the relationship between FinTech and the banking industry in 2017. The writer argues that while many FinTech companies initially were all about disrupting the banking industry (which was slow, aging, and not customer friendly), many FinTech companies have now changed to working with banks in a mutually beneficial relationship.
In my opinion, this article doesn’t say anything too new, but it does demonstrate how both the upstart, faster moving industry (FinTech) and the established by slow moving industry (banking) have had to adjust to one another in order for both industries to evolve. Two of the common reasons given why FinTech hasn’t toppled the banking industries has been lack of credibility and inexperience dealing with complicated regulations. It makes sense that by partnering with banking companies, FinTech companies can either learn how to deal with the regulations or simply let their banking partners take responsibility for them. In addition, partnering with banks gives FinTech companies more money without having to ask VC’s, and gives them higher brand recognition and trust (the article is correct when it says that people are more risk averse when it comes to money as opposed to things such as ride sharing). One potential downside for FinTech companies working with banks is that they might lose name recognition. For example, a product from a FinTech company that has partnered with JP Morgan Chase might be considered by the public has a Chase product, and the original FinTech company might not get the credit it deserves. On the other hand, traditional banks don’t have much to lose from a big picture perspective in partnering with FinTech. These partnerships allow banks to save money, come up with faster solutions, but the downside could be that people could lose their jobs as a result of being essentially replaced by the FinTech solutions.
https://www.forbes.com/sites/forbesfinancecouncil/2017/02/13/is-2017-the-year-bank-fintech-partnerships-hit-productmarket-fit/2/#326c9f35112d