In the financial industry, new type of startups have spawned and rampaged in a once strongly protected and highly regulated market. We know them as Fintech. These players have initiated new markets or revamping old aging business. Their targets usually focus on business where banks have a high margin and where traditional institutions can’t keep with the need and innovation coming from the digital space.
In a defensive posture, many banks are trying to protect their assets and somehow become reluctant to interact with these new actors. However Fintech did and will bring agility and innovation where there were limited successes in these traditional sectors. Paragon would be that a new breed of financial services breed and provide consumers real innovation and create a breach between traditional bank and financial services and those new digital services.
From a higher overview, the outcome might be different. If we look back, 15 years ago another sector did face the same issue, i.e. the Retail. 15 years after 8 out of 10 largest e-commerce players are owned by Retail. Even during years, some believed that e-commerce would kill the retail now History has proven it will not be probably the case.
Digital, Entrepreneurship and Investments allow the sector to grow faster and mutate to the next generation of Consumers services. Afterwards, since the traditional actors would be able to acquire the Fintech, it will only benefit them and in competitive way vs if they’ve tried to innovate themselves. Of course, amidst the pack a few players will become the “Amazon” of the Fintechs but the rest of the industry will be probably still be (or be owned) by the same names we already know. So Fintech might more be an evolution of the Financial Industry rather than a Spin-Off.
This is of course a very personal take, but let’s rendez-vous in 15 years to see how the story will unfold.
This article is from Vol.1 - Issue 6 of the Payments & Cards eMagazine (PCM), you can view the full issue here.
Vente-privee is the French eCommerce firm that pioneered the model of online flashsales. The firm celebrated its 10th anniversary in 2011, was developed in an online environment to host sales of designer brands only for members with discounted prices from 50% to 70% off. Please visist Vente-privee here: www.vente-privee.com
Son Nguyen, Program Director, Vente-privee
Son Nguyen oversees strategic plans for Finance and in particular Payments & Fraud. He's part of the MRC European Advisory Board and of the FEVAD for payment commission and along with other regulatory commissions with French authorities.