Digitalization is ubiquitous and new business models emerge and disappear at a pace most established industries have not yet gotten used to. To the surprise of many, FinTechs have started to conquer the financial world, driven by technology, innovation, and a forward-looking entrepreneurial mindset.
Companies such as N26, LIQID, or IEX have presented novel solutions for banking services such as the extension of loans, general cash transfer, and the investment of private savings. They can even offer independency from traditional stock exchanges. FinTechs facilitate processes, increase efficiency, save time, and provide a richer user experience.
Their value propositions have seemed auspicious to several established financial institutions wherefore a number of them have already been acquired by commercial banks, who saw the FinTechs’ potential and the simultaneous threat they represented to their ingrained business models. However, just as many FinTechs have continued to develop their products and widen their services portfolio, while some have even started to register for their own banking licenses and will thus also be subject to regulation in future.