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Fintech won't kill 'dinosaurs'
67 percent of Indonesians are not risk-lovers.
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According to research conducted by the New York FinTech Innovation Lab in 2017, more than 85 percent of financial institutions working with the FinTech Innovation Lab are creating partnerships with financial technology firms, or fintechs. (Shutterstock/File)
B
ack in 1994, Bill Gates claimed that “we need banking, but we don’t need banks anymore”. At that time, he even called banks “dinosaurs” and forecast that technology would drive them to extinction. But instead of going extinct, the dinosaurs have been evolving. The key word is ‘‘evolve’’.
The experience of the last couple of years suggests that the best way for banks to evolve will be through working with newcomers rather than against them. According to research conducted by the New York FinTech Innovation Lab in 2017, more than 85 percent of financial institutions working with the FinTech Innovation Lab are creating partnerships with financial technology firms, or fintechs.
Without neglecting the meteoric growth of global investment in fintech ventures, which has tripled to more than US$12.21 billion, banks should still be here to stay unless they prove unable to maintain a competitive advantage in the core and other products they offer.
The banks most likely to survive are those that embrace the rapid progress of information technology. Treating these changes as a threat for which defensive actions must be taken, will cause a setback. Thus, one can conclude that Gates’ remarks were largely correct, but the emphasis should be on the word “evolve”. Banking and banks will survive, provided they treat these dramatic changes as opportunities to strengthen their position in the financial sector.
