For the first time in three years, the post-crisis regulatory squeeze no longer tops our retail banking trends. Banks may not like the renewed regulatory focus on know-your-client and suitability, but they now have a more pressing draw on their resources: financial technology (fintech).
The scale of disruption is unprecedented, across every market, every distribution channel and every single product line. Fintech poses a potentially fatal risk and will be a severe test of banks' IT systems and their ability to respond to rapid changes in customer expectations, short product development times and growing cyber risks.
Discussions now centre on just how quickly and how far transactional banking will be unbundled and margins slashed. Strategically, banks have a number of potential responses. Some are building their own technological solutions, others are buying the fintech upstarts outright, and others are partnering or opening up their bank platforms to give third parties access to customers.
