NonStop Insider

job types

Site navigation

Recent articles



For monthly updates and news.
Subscribe here
NonStop Insider

Can Financial Services Institutions Rise to the Challenge of Fintech?

Lusis Payments


lusis tango logo


Retail payments are a route to profitability for banks, but it’s also a route to market share and new customers. FinTechs have one main advantage in the market – flexibility. They have been able to move quickly to develop new features and roll them out before traditional banks could. Now however, we see traditional banks rolling out those same features – FinTechs will lose some of their competitive advantage if they can’t maintain the same level of innovation as before. The challenge for traditional banks is that it’s taken them a long time to get here – they couldn’t respond to the challenge as soon as it happened. At the end of the day, this is a conversation about tech infrastructure. Challenger banks, working on modern tech stacks, could quickly develop and deploy.

The way for traditional institutions to take this on is to introduce similar degrees of agility in order to give options to customers who don’t like the pared-back experience of digital banks but feel traditional banks don’t understand their needs either. The issue is inertia born of fear.

When a bank’s technology fails, the first repercussion is that it makes headline news. The second is that the regulator gets involved. Combined, the bank could face fines, fees and a badly damaged reputation. The desire to avoid this scenario at all costs stifles a lot of technology advancement in the financial space.

Unfortunately, in the long term, this policy is likely to create more problems than it solves.

If we look even further into the future, disruptions from the likes of Blockchain and AI could bring further, more dramatic change to the industry. While they are still very much in the early stages of development and roll out, a CTO must be able to anticipate the change that these, or other unknown technologies, might bring – and be in a position to react and adapt. Technology leaders must be able to keep pace with the new products and services that technology will introduce. And do it efficiently.

Embrace the experience you have

The traditional bank carries with it a certain amount of baggage, but most of that baggage is good baggage – it’s stability, security and market knowledge. Focusing these factors on customers will be a winning combination. This is an area where banks already excel. Data, customers and capital to fund payments projects are already there, whereas FinTechs have to build from the ground up.

The FinTech battle is far from over – it’s barely started. Whether your strategy as a financial institution is to be proactive and aim to beat the FinTechs at their own game, or whether you are reactive and want to move second, there’s still a lot of time left on the clock.

Continuing to depend on rigid infrastructure leaves banks vulnerable in the long term, and unable to react to changing market conditions. Of course, banks could just carry on another year and another year and another year and leave it for a successor in their role. The pressures on banks to change never feel immediate until there’s a crisis. And then it is often too late.

Brian Miller
General Manager
Lusis Payments
315 Montgomery Street #900
San Francisco CA 94104
(+1) 415 829 4577