In this episode of Born to Disrupt, hosts Mark Walker and Simon Hardie engage in a thought-provoking discussion on the evolution of banking, the rise of fintech, and the future of financial services. They explore how the banking sector has transformed over the past decade, the role of neobanks and fintech disruptors, and what lies ahead for both traditional banks and new entrants in the industry.
Listen to the episode here:
The Origins of Fintech – Lessons from 2008
The conversation begins by looking back at the 2008 financial crisis, particularly the collapse of Lehman Brothers, which is widely regarded as a catalyst for fintech innovation. Prior to the crisis, most consumers had an unquestioned trust in banks, assuming that their money was safe and that banks operated in their best interests. However, the global banking meltdown shattered this illusion, exposing the fragility of financial institutions and leading to a demand for new, more transparent banking models.
This moment paved the way for the birth of neobanks and digital-first financial services, allowing fintech startups to offer customer-centric, agile, and technology-driven solutions that challenged traditional banking norms.
The Evolution of Banking – Where Are We Now?
The hosts discuss how the banking and payments landscape has shifted since 2008. The emergence of neobanks like Monzo, Revolut, and Starling has revolutionised how consumers interact with financial services. These digital-first banks have challenged incumbents by offering: ✔️ Frictionless onboarding and mobile-first banking experiences ✔️ No hidden fees and more transparent financial products ✔️ Personalised financial insights and data-driven services.
While fintech companies have gained significant market share, traditional banks still dominate the financial ecosystem, controlling over 80-90% of the global balance sheet. However, fintech disruptors are growing rapidly, with some now valued similarly to major banks despite having far smaller balance sheets and employee numbers.
The Two-Way Street of Fintech & Banking
One of the key insights from the discussion is that the relationship between banks and fintechs is evolving. Rather than being outright competitors, there is now a growing "two-way street" between the two industries.
Fintechs bring innovation, agility, and customer-centric solutions.
Banks offer stability, regulatory experience, and access to large-scale financial infrastructure.
The conversation suggests that the future will likely see greater collaboration rather than outright competition, with banks adopting embedded finance and open banking models to stay relevant.
Banking in Different Regions – West vs. East
While fintech's origins are often seen as a Western phenomenon, Asia, Africa, and Latin America have experienced their own fintech revolutions, albeit driven by different factors:
In regions like China and India, fintech has grown due to underbanked populations, mobile-first adoption, and regulatory support.
In Africa and Latin America, fintech success stories such as Nubank and Time Bank have emerged, filling gaps where traditional banks have failed to serve customers effectively.
Meanwhile, in Europe and the US, neobanks have focused on challenging incumbents and capturing market share from existing institutions.
Despite different starting points, the global fintech movement is converging, with common themes of digital payments, embedded finance, and alternative financial services shaping the industry’s future.
What’s Next? The Future of Banking & Fintech
Looking ahead, the next major wave of disruption in banking will be driven by data and AI-powered financial services. Traditional banks face a critical challenge—they must: ✅ Modernise legacy systems to keep up with agile fintech competitors ✅ Leverage AI and data analytics to offer personalised financial products ✅ Adapt to changing consumer behaviour, as younger generations move away from traditional banking relationships
The hosts highlight the growing threat to banks’ deposit bases, as fintechs continue to prove their ability to manage deposits, lending, and financial products more efficiently. Companies like Revolut and Nubank are now competing directly with banks, not just in payments but across a full spectrum of financial services.
Final Thoughts – The Role of Competition & Partnerships
The discussion concludes by emphasising that competition will be the key driver of transformation in banking. While banks are unlikely to disappear, they must embrace:
Partnerships with fintechs and alternative financial service providers
A more data-driven, AI-powered approach to banking
Increased efficiency and automation to remain competitive
The next five years will be crucial in shaping the future of banking, and those who fail to adapt may struggle to survive.
Comments