How do we see the future of fintechs and banks? Will these financial players end up being competitors or partners?

It is no secret that during the past years, the stability of banks has been undeniably shaken. Digital disruption has affected the industry and steered fintech growth. Because of that, banks have been partially replaced by fintech companies that offer faster, more convenient, and cheaper financial services. But we understand that fintechs will never completely replace banks.

It is obvious for everyone that fintech cannot exist without banks, but what about banks? Because banks are losing customers and their customer activity has decreased, they have started looking for ways to lower their costs and make additional revenue streams to keep their expensive systems running. But one thing is clear that banks and fintech can no longer exist as separate entities.

That is why a handful of banks have adjusted their strategies and shared their infrastructure and even their licenses with other financial players. This is called a Bank-as-a-Service (BaaS). In other words, banks earn money by giving fintech companies or even large merchants access to their IT and business infrastructure.

Source Credit: FinExtra