Digital Natives Demand More

Digital natives are quick to adopt online solutions and ready to shun incumbents that aren’t able to meet their expectations.

Changes in technology have allowed financial institutions to provide a more diverse range of products, which in-turn requires adaptive distribution, monitoring and administrative systems.

Technology is also reducing fees and increasing the responsiveness of financial services, opening up the potential for new players to compete against the dated systems of incumbents.

Incumbents Cannot Provide It

While FinTech companies present a threat to incumbents, they are also able to help them grow and increase efficiencies in their operations. Legacy infrastructure weighs down the incumbents, preventing them from innovating quickly. One of the largest financial services providers has had their computer infrastructure likened to a giant rubber-band ball
of ad hoc fixes.

Employees in incumbents aren’t encouraged to take career risk and try new things. Any innovation in incumbents is typically slow to respond to changing customer preferences because of decision making hierarchies.

They are Forced to Partner Or Compete

Incumbents are being forced to either work with the new-comers or absorb them to offer their clients the same seamless services that they have come to expect in this age of instant gratification.

Of those incumbents that have worked with FinTech providers, 87% have been able to cut costs. While 54% of incumbents have experienced increased revenue from working with FinTech providers.