Cambridge Business Association
Fintechs May Be Corporate Banks’ Best “Frenemies”
Article

Fintechs May Be Corporate Banks’ Best “Frenemies”

Oliver Dany, Ruchin Goyal, Jürgen Schwarz, Pieter van den Berg, Alessandro Scortecci and Steffi to Baben
Boston Consulting Group, 2016
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Editorial Rating

7

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  • Eye Opening

Recommendation

Fintechs are shaking up the world of banking. This concise report from professionals at the Boston Consulting Group reveals that these upstart firms – involved in a wide range of activities, from payments to supply chain financing – are graduating from serving individuals and small businesses to working with medium-sized and large enterprises. While traditional banks hold a distinct advantage when it comes to client relationships, infrastructure and financial strength, they’ll need to incorporate fintech innovations into their businesses to remain competitive. getAbstract recommends this enlightening article to financial services professionals interested in the advantages of fintech alliances.

Summary

Since 2000, investors have poured about $78 billion into fintechs, and roughly half of that has financed firms that serve the corporate sector. Traditional banks are beginning to feel competitive pressures, particularly in low-margin products and services that fintechs are more profitably exploiting. But banks hold several advantages that fintechs have difficulty matching: Established financial institutions can fund themselves via stable deposits and broad access to capital markets. Banks have solid, long-standing relationships with major corporations in what essentially remains “a people business.” Banks can craft...

About the Authors

Oliver Dany et al. are professionals with the Boston Consulting Group.

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