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At the Benzinga Fintech Awards, the survey says banks are pretty much toast
Even when banks try to embrace innovation they can’t catch much of a break from the startup folks spreading the gospel of speed, low-pricing, and less paperwork.
Carey Kolaja, global product officer at Citi Fintech, put a good face on things as she stepped into the lion’s den of startups, moderating a panel on the future of banking at the Benzinga Fintech Awards conference in New York on Monday.
How can traditional banking giants find a way to reach the digital natives [read: millennials] who don’t like talking to tellers or filling out print forms, she asked.
For the record: Did you ever meet anyone who loved those forms?
“It’s hopeless for banks,” said Barry Silbert, founder and CEO at Digital Currency Group. Partnerships, shmartnerships. Fintechs can’t save banks because the industry is a mess.
“I don’t think fintech is an enabler or a destroyer of the big banks,” Silbert said. “I just think these global behemoth banks and the universal banking model have proved not to be effective.” Even Sandy Weill, founder of the original financial supermarket, has stated that his brainchild is a no-go.
Fintechs are ripping customers from banks with payment and lending and trading apps that are faster, cheaper, and easier to use than legacy offerings.
Jud Pyle, head of retail at Apex Clearing, acknowledges “the lending experience” at banks is terrible. Yet he was a lone voice offering hope on the panel on banking. If that experience changes even “a little” consumers might stick with them. “Banks understand what banking is.” Maybe Sandy Weill was wrong about being wrong, Pyle suggests. And if you’re big that gives you a marketing advantage. Consumer-retention through footprint.
That was the minority view.
For the most part, fintechs are counting on the withering away of traditional financial institutions. Death through disintermediation and lack of imagination. Think RobinHood. Venmo. Square. Funding Circle – and so many, many more.
The banks, says one long-time fintech player, think they can save themselves by going after everything cool new thing in the marketplace. Good luck to all those accelerators. “There’s no strategic thinking. They don’t know where they are headed.”
Photo: Iwan Gabovitch