THE FUTURE of financial services is going to be all about fintech.
If you don’t believe that then take a look at a deal Royal Bank of Scotland did last month, when it paid £53 million to take over Glasgow software business FreeAgent.
Although this happened to be RBS’s first acquisition since its ill-fated buy-out of ABN Amro, it was notable for another reason: it signified just how important technology has become to the big banking players.
Indeed, as RBS chief executive Ross McEwan said when announcing the deal: “We believe that a technology-enabled solution for our business banking customers will make it easier for our customers to build their businesses safely and securely.”
He is not alone, with all the mainstream banks vying to develop technologies that can not only bolster their profitability but transform the customer experience too.
Yet, as the FreeAgent deal suggests, large banks with creaking systems are perhaps not as well placed to do that as the many businesses that have sprung up specifically to fix financial problems using technology.
While that puts the power very much in the fintech companies’ hands, the fact that few have moved beyond the start-up stage limits the kind of impact they could have.
Which is why coming together to build and drive the sector from within is a sensible move.
Individually, fintech firms are making incremental changes to the way the financial services sector operates.
Collectively, they could well revolutionise it.
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