The second 'wave' of FinTech

September 30, 2019


The desire from FinTech on disrupting the financial services industry, and

thus displace incumbents, sees itself obstructed by one facet – banking

licenses. By holding a banking license, the perspective shown towards the

holder changes dramatically, with an encouraging set of eyes from

investors to a cheaper access to capital. These advantages, among many

others, are critical in the taking of a considerable size of the market

share, hence the high number of FinTech’s pursuing a license.


At first, FinTech merely ‘unbundled’ banks services by focusing on one

specific service driven by innovative solutions so as to have an advantage

over incumbents. These times, however, seem to be coming to an end.

The second 'wave' of FinTech is keen in changing this approach, by now “re-

bundling” the services of a bank. Take Revolut as an example. It started

off as a digital wallet, and now has expanded its services to crypto

trading, brokerage services and bank accounts.


This hunger from FinTech is already accelerating the pace at which the

financial services industry is seeking to adopt innovative solutions, with

the industry becoming increasingly driven by technology. Will this race

towards new disruptive solutions create the risk of unintended regulatory

gaps in the banking industry? Or, will this path towards new business

models ensure the safe and soundness on consumer protection?


Although as of now, these are mere assumptions, regulatory authorities

should hold their focus on striking the right balance between financial

stability and protection for consumers while leaving room for innovation.


Click here to view the whole article.


Share on Facebook
Share on Twitter
Please reload

Featured Posts

Payment Services Act comes into effect

January 28, 2020

Please reload

Recent Posts