Report: “Fintech vs Fintech”? The rise of digitalisation in banking

Written by Alex Hamilton
7th September 2021

The fintech market is a completely different beast than it was even five years ago.

In the wake of the financial crisis, when financial technology companies, founded by disgruntled bankers or bright-eyed graduates, sought to solve what they saw as fundamental issues in the system, few could have predicted the equally fundamental shift occurring around us today.

Fintech has gone from a sector revolving around finding innovative solutions to specific problems into its own thriving mass market.

Where once people saw the plucky underdog of fintech taking on the Ivan Drago-esque figure of the banking sector, now fintech stands next to traditional banking, with eye-watering market capitalisations and funding figures to rival all but the largest institutions.

As the sector takes its seat at the table, with one leg planted firmly in the financial system and another brushing against the most innovative of Silicon Valley luminaries, the definition of what it means to be a “fintech” has changed.

The fintechs of 2021 and beyond share little in common with those who broke into the scene as little as three or four years ago.

Digitisation has gone from a “nice to have” to an imperative for many in the banking sector, and nothing has quite put fuel to the flames quite like the COVID-19 pandemic.

As customers diversify not just the way they interact with their financial institutions, but also the ways they live their daily lives, so must an innovative company pivot – strategically and technologically – to meet these changes.

Yet now the fintech sector is awash with popularity, mass market adoption, and VC funding. Challenger banks that once counted users in the thousands now count them in the millions. Others wrestle with regulatory frameworks with the same gusto their banking contemporaries do.

Where once fintechs looked on the banks as competition, and now see them as collaborators, or slow-moving contemporaries, what do budding new firms think of those who came before them, the legacy fintechs?

In this deep dive industry report, produced in collaboration with Incat, FinTech Futures investigates whether a new market can emerge, a new competitive scene where fintech battles fintech for the scraps.