With global fintech funding exceeding $111.8 billion in 2018 alone and growth spreading across practically all banking and financial services segments, these companies continue to present an array of opportunities to the overall banking industry.
Historically, fintechs have occupied segments with relatively low barriers of entry such as payments and personal finance, promoting their advantages in customer experience, technology and affordability. Meanwhile, banks continued to differentiate in segments that demand high investments, are regulation-bound, and are limited by the domain expertise of people — all indicative of high entry barriers.
But the landscape is rapidly evolving, and fintechs are traveling upstream. For instance, a growing number like SoFi and Square are entering into markets such as investments, cash management, and compliance while early entrants like Stripe and Braintree continue to strengthen their positions in segments such as payments.