27 November 2015
Fintech Disruptors Report 2015: Startup Banking
Whatever you call the wave of technological disruption confronting banking, the pace of change in the global banking industry over the last decade has been unprecedented. A pace that appears to have accelerated dramatically in the last two years.
The result of a perfect storm of regulatory failure, that ended with the crash of 2008. Rapid growth in smartphone take up, falling technology costs, and the coming of age of the millennial generation, have removed, or lowered, many of the traditional barriers to new competitors in the last major global industry to be disrupted by mass smartphone adoption.
This latest disruptive wave is neither new, nor specific to the advanced economies of the OE CD - spawned as much by the first internet boom at the turn of the twenty-first century, as by the successes of direct phone and postal banking in the mid 1990s.
It is arguably the launch of the relatively low-tech M-Pesa by Kenyan mobile network operator Safaricom in 2007 however that presaged the potential for mobile phones to replace the bank branch and payment cards as the primary delivery channels for everyday financial services.
The entry of a non-bank into the financial affairs of unbanked customers, without the traditional banking staple of a retail branch network, and Safaricom’s success in fulfilling an unmet need by leveraging a low cost technology to reach new customers, fired a shot that was heard around the world marking the beginning of the redefinition of banking services everywhere.
It is from this starting point, that this report on the disruptive wave rippling through the financial services industry takes its cue. The result of a series of interviews carried out between September and November 2015 with banks, incumbent financial institutions and high profile
startups in Europe and the Middle East, the report highlights the forces shaping financial services delivery across the region.
It also seeks to provide insight into the lessons learnt by companies both old and new as they innovate and a roadmap for the years ahead as ‘digital’ migrates from delivery channel to the driving force in modern banking.