Chapter 17

They are Not Dead Yet

How Big Financial Institutions Will Work with Fintech Startups to Define the Market Structure of the Future

Abstract

Fintechs are playing a transformative role in the development of innovative financial applications but the costs of switching to new services is high and the benefits of new innovations are often perceived by consumers as not being material. Consequently, customer willingness to switch away from incumbent banks to new Fintechs has been overestimated. The big financial institutions have capital and customer bases. The competition from the big banks is taking several forms: internal and external incubators; coinvestment in startups, acquisitions, and a fundamental alteration of the internal banking ...

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