Disruption of the Financial Services industry is happening; slowly. It took about 20 years for Amazon to fundamentally change how we shop, and even how we use the Internet. It has taken only about 15 years for Facebook to change how we interact socially. So changing financial services should be fast-moving too, right?

Wrong. It has been a slow process, with technology introduced to make cash available outside of banking hours about 50 years ago. The ATM changed how people were able to interact with banks and improved security and accessibility. Various other measures, such as Internet banking and an increasingly cashless society have seen people embrace technology that places banking in control of the customer. However, despite all these advances, big banks remain in control in most countries.

Fintech, defined as “a new financial industry that applies technology to improve financial activities,” is also attempting to shift the power dynamic. The disruption that is expected to take place in the next 30 years is expected to take the form of one of the following three scenarios:

  1. Traditional financial services companies absorb fintech companies.
  2. The market fragments and traditional players lose their strength as niche-market players gain influence.
  3. Mega fintech replace traditional players.

The Long Game

The many rules and regulations that exist and compete across international financial markets are of benefit to traditional players. It is the slow and cumbersome systems that give large institutions time to develop game plans and include competitive strategies that see them apply fintech offerings to their own product guide and squish small innovators.

In the long game scenario, the traditional banks would retain their status dominating the market, and fintech companies would become obsolete as frontline service providers. They would simply inform developments and become a research and development branch of an existing system.

Market Fragmentation

Technological advances have meant that the costs associated with launching and maintaining alternative financial services are significantly lower than any other point in history, making the businesses more accessible than ever before.

The evolution of fintech in various areas of banking and insurance has seen an increasing number of customers choose independent fintechs rather than traditional services. The falling costs and increased services are driving competition. It could mean the slow death of large traditional institutions as niche market players offer streamlined and efficient services that are secure and easily accessible, without the many hurdles of traditional services.

Digital nomads are driving this change as they require more specific services. The movement to work remotely from any location in the world is also driving technology that answers ‘yes’ and provides solutions for common problems, such as payments, transfers and taxation. In this scenario, the traditional banks slowly lose all their customers and fintech steps in.



Super fintech’s emerge as the marketplace leaders and replace traditional banks. Rather than many fintechs focused on their area of expertise, super fintech would simply swap out the existing system.

While it is difficult to predict which scenario is likely to win, or even which would be of most benefit to the largest number of people, it seems inevitable that big changes are coming. If the slow evolution of the ATM is anything to go by, it might be a long road before monumental shifts are made, however, like an iceberg, perhaps there’s more going on beneath the surface that we don’t see just yet.