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Marieke Flament, MD of Europe atCircle argues that banks and FinTechs need to collaborate and innovate to seize opportunities. 

Marieke Flament

Marieke Flament

For years banks have seen FinTechs as non-serious non-sustainable companies. However, FinTechs are gaining traction and scale and can’t be ignored anymore – the UK houses more billion-dollar FinTech companies than the rest of Europe put together. Ultimately, the growth in FinTechs is disrupting the financial services industry. Many high street banks had a monopoly across their product offering – from loans, savings, investments and financial. Those days are now a distant memory. Consumers are now comfortable managing their finances in new ways. In fact, an EY Global Consumer Banking Survey found over half (52%) of UK banking customers are comfortable managing their finances solely online or by mobile. The same survey found 37% of banking customers have used non-bank providers in the last year for both core banking products and other financial services products such as car loans and insurance products, and 23% of customers are considering using non-banks going forward[1].

The evolution of banks in a digital revolution has not happened as quickly as other industries. Unlike the retail and entertainment industries where software has driven disruption, the financial sector has taken a slower approach to change. As a result of the technology evolution, the ecosystem is however evolving and we need to re-think roles and collaboration. FinTech companies have entered the frame and leverage new technologies such as blockchain, AI, Machine learning. Furthermore, machine-learning technology is helping people make fast, better and more accurate decisions taking the human bias out of any decision making. FinTech companies are also very good at getting innovations faster to markets because of their digital first culture and fast development cycles. At Circle, for example, our app gets new developments every week, several times a week.

There will most likely always be a need to work alongside banks who have liquidity, large customer bases, decades of experience in dealing with industry regulation. For example, Circle has worked with banks and regulators to enable its launch, Circle has been committed to developing technology that transforms financial services. Central to our development we have been placing the customer at the heart of our value position – we want to create a world where consumers can transact with one another in the currency of their choice instantly, globally, securely, and for free.

It would be premature to suggest that FinTech will eliminate traditional, institutional banks in the future. Banks will most likely remain part of the fabric of the international banking sector for decades to come. However, FinTech will continue to disrupt the sector. Accordingly, it is up to traditional banks to become more agile and flexible. Traditional banks may begin to take on more of a FinTech form, offering customers some of the services that helped make FinTech organisations so popular in the first place.

To truly innovate, we believe it is vital to move away from the historical opinion from banks that FinTechs are “competition”. Instead traditional banks and FinTechs should coexist and collaborate, playing to each of their strengths will ensure a win for all and ultimately drive better products for the end-customer.

Circle is a free mobile social payment app, available on iOS/imessage and Android and the web. It simplifies mobile payments, ensuring you can send and receive money instantly and for free using your friend’s email address or mobile number whether they are in the UK, Europe or America.


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