Robert Kerner
Robert Kerner 11 May 2016

From The Big Bank Perspective, Fintech Friend, Foe Or Opportunity?

You almost cannot be at a London meeting with financials professionals where the term Fintech does not come up. And why not, this sub sector of the financial world is exciting; growing at light speed and even has Richard Branson involved!

The reaction I see within the established banks ranges from "Who cares about these little companies?" to "The sky is falling, we need to be involved, whatever that means, now or we are going the way of Kodak". These polar discussions are entertaining but I think gloss over the real issue/opportunity. Are these friends or foes?

The “mood music" I would argue over the last year from Fintech players has changed from "We are here to take down the banks" to "We look to collaborate with the big banks". Why the sudden change of heart? My thinking is that the reality (and hard work) of customer acquisition in a crowded online marketplace has started to sink in.

How should the established banking sector view this change? I would argue that a much more nuanced approach to the Fintech sector is needed. If big banks saw Fintech just as much as an opportunity as a threat, I think the approach would arrive at a much more sensible business approach and discussion. The first step needed is for banks to look as the overall bank as a series of smaller business vs. the one entity. By breaking this down, it allows for a calm discussion focused around how Fintech companies could be an asset or a liability just as you might normally do with your competitors. This would lead to natural discussion, should we?

1. Use this service to enhance our offering

2. Partner with these firms to gain access to services and people

3. Take an equity stake to gain access to the thinking to learn for ourselves

4. Look to purchase them to get access to stop our rivals

5. Do nothing and see how the inevitable consolidation plays out

The sooner this conversation and mind set gets in place the better it will be for both the big banks and the Fintech sector. Let's stop the friend or foe discussion and get back to business.

Rob Kerner is Head of Strategy for the Personal & Business bank at RBS and also speaks externally at conferences on strategy, innovation and customer experience. For more details, see profile at:

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