If you’ve been reading up on startups lately, you’re likely to have heard the term “Fintech”. Tech and finance are beginning to join as one through countless innovative startups. Many believe that fintech is the way of the future. After all, it is the first big change in the world of finance to happen in quite some time. Not to mention that banking online is much more easy and convenient than waiting in an actual physical bank. But the question becomes, how much of a shift will truly occur? Will there be a time when the majority of consumers will not be logging on to the website of their big banks, but instead relying on apps for saving, lending, and otherwise managing money?
Tech startups are hoping to steal the spot of large banks in the world of managing finances. They haven’t succeeded yet, according to TechCrunch. Fintech is on the rise, but big banks still have a leg up on the competition. The main advantage they have is, of course, experience. Big banks have had many years to create a strong infrastructure to rely on. These years of experience have also allowed banks to gain the trust of consumers. When it comes to where we put our money, very few people would choose a startup that is not even a year old over a bank that many people have known and trusted for years. It seems many consumers are using the old adage “If it ain’t broke, don’t fix it.”
Still, we cannot be sure that big banks will dominate the finance industry forever. It is fairly common for businesses to pay workers via apps generated by the world of fintech. Not to mention how easy splitting a bill has become with Venmo. Big banks aren’t nervous to be losing their spots at the top just yet, but we have no way of knowing what will happen in the future. Rob Frohwein of Kabbage states, “We’re just at the beginning of this renaissance in alternative lending–and I look forward to the day it’s not called an alternative.” While it certainly seems possible that fintech will lead in finance one day, that day doesn’t seem to be arriving as soon as Frohwein thinks it will. Big banks may start to worry with the way new tech startups are leveraging on banks’ weaknesses. Millennials will lead a shift to fintech, but big banks will not be likely to disappear entirely.