“How FinTechs are bothering banks” – etventure and FintechStars in ManagerMagazin
16. October 2015
“Just a decade ago, the world was perfectly fine for traditional banks”, according to Manager Magazin. Since the financial crisis and bailouts through taxpayers and governments, banks have struggled to rebuild their customers lost trust. As Manager Magazin puts it: Digitalisation is a chance for them to do so. However, FinTechs are growing rapidly: “They offer what banks have to offer – just on the web. (…) This leaves the traditional financial institutes with a real challenge.”
In the article “How FinTechs are bothering banks“, Manager Magazin editor Arne Gottschalck describes the chance and challenges that the financial industry is facing and quotes Gregor Puchalla, CEO of Fintech Stars, “the Fintech-Unit from digital consultant etventure”.
In conclusion: “banks used to have two things – capital and customer access. For centuries, this was enough to be successful. But then the FintTechs came (…). Too small, no weight.” Initially, the financial giants were not very impressed by the young attackers. But while large banks were mostly occupied with themselves in times of the recent financial crisis, FinTechs was able to persuade with three abilities. Customer orientation, full automation, and the resulting low service costs as well as transparency.
According to a study quoted by the Manager Magazin, 6 out of 10 germans would be willing to handle investments and credits with “the new ones”. “And the younger customers are, the more open they are.” This is exactly where the fundamental problem of traditional banking lies: when the younger target audience self-evidently utilizes online providers for their banking, it will be very difficult for banks to recapture this audience at a later point.
A great chance for both sides, banks as well as FinTechs – lies in cooperation. Banks are starting to learn that FinTechs are the ideal complement. Market expert Gregor Puchalla, CEO of FintechStars is quoted: “Banks learn “innovation” from FinTechs which is very hard to do in large firms without the support of the board”. FinTechs on the other hand profit from the bank’s customers access. Due to this, many large banks are currently cooperating with FinTechs or buy their way in.
FintechStars is the central knowledge unit from etventure in the financial sector. They are actively developing Fintech-projects in the startup and corporate sector of etventure. Their goal is to establish partnerships and connections with established financial service providers for the evaluation and implementation of business models.