New players on the banking scene are bringing a host of changes to the industry. But in some cases, these disruptions are more likely to be met with pushback from established players than open arms.
Some of the more notable disruptions seen in the financial industry are being caused by new players taking on the role of conventional banks and other “challenger” institutions that are taking lessons from decidedly non-banking industries. Other developments are inviting disruption by prompting some countries to embrace the idea of a cashless society, while other developments could remove some common frictions typically involved in filling out insurance forms. But some of these developments are drawing complaints from traditional banks, which are seeing new players encroach into financial operations where they have traditionally operated. As newer FinTechs seek to expand influence, some conventional banks are stepping up efforts to fight back with legal challenges.
The July PYMNTS Digital Banking Tracker™ looks at the latest trends in the digital banking space, including efforts by some FinTechs to challenge larger players, moves to adopt biometrics and new solutions to reduce the burden of paperwork.
Big shifts in digital banking landscape
As the banking and finance sector attracts new players, the question of who can do what is in need of greater clarification.
FinTech SoFi, for instance, appears to be ready to take on new responsibilities. The company recently took the first steps to operate as an Industrial Loan Charter by filing an FDIC application. If approved, SoFi could offer some services provided by traditional banks. But established banks might not be willing to compete with the FinTech for business and are pushing back against the application, arguing that the company must be subjected to the same regulations as brick-and-mortar banks.
Other efforts for FinTechs to join the banking community are facing much better reception. Look at Sweden, where eCommerce payment provider Klarna moved closer to its goal of becoming the “Ryanair of the FinTech sector” when it received a full banking license from Sweden’s regulatory body. Klarna has about 60 million members, making it one of the largest financial institutions in Europe. Another European FinTech was recently given regulatory approval that could help it expand its own reach. British regulators approved a license for Starling Bank to operate in Ireland. The development is significant because it provides the mobile-only institution an opening to expand its reach across the European Union.
Changing the rules of the digital banking game – with video games?
What do newcomers to the digital banking world typically have in common (besides banking itself)? All of them are inviting disruption by thinking outside the typical traditional banking playbook. Case in point, mobile-only challenger institution Atom Bank is tapping into learning from the video game industry to inform its company’s development, more so than gleaning inspiration from established banks. For the July Tracker’s feature story, PYMNTS interviews Stewart Bromley, Atom Bank’s chief operating officer, about what digital industries outside banking can teach banking newcomers and established players alike.
Check out the July Tracker for the feature story, along with the latest headlines and trends from across the digital banking landscape and a provider directory with 198 players in the digital banking space.
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About The Tracker
The PYMNTS Digital Banking Tracker™ brings you the latest news, research and expert commentary from the FinTech and consumer banking space, along with the rankings of 198 companies serving or powering the digital banking sector.