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Yet another post that confuses a company for an industry. Yet another post that banks will ignore precisely for that reason. After trying it for 5+ years and finding that it didn't work, wannabe disruptors have themselves stopped chanting the disruption
mantra and have now started chanting the bank-fintech partnership mantra. But, alas, that won't stop posts like this.
Ketharaman, Thanks for the counter view. I have to say that in reading your note I dont have anything to disagree with on the substance re partnerships. The point of this article is to flag the need for action, and to point out by analogy how business when
faced with rapid disruptive change need to show more agility in responding to change. Its also the case that it is seldom as simple as 'a one size fits proposition' being the answer. The challenge to introduce innovatiove solutions to FS businesses is
and will continue to be one influenced by a mix of partnership and internal driven innovation. There is no single silver bullet.
I agree with Katharaman. BlackBerry and Nokia were individual companies that failled to adapt to changing technology. Individual banks may lose their customers over time to more innovative players, but most will adapt. A significant number of people do not
need a sophisticated bank any more than they need a sophisticated phone.
Simplicity is said to be the hallmark of iPhone, so the mega success of iPhone may not negate your view that people don't need a sophisticated phone!
OTOH, if people only buy what they need rather than what they want, so many industries / companies would perish and GDP of the world would crash. So, even assuming for the moment that people will aspire for - though not need - sophisticated products including
banks, the bigger question is, what will they get from fintechs. Take a product like credit card. More than 5 years since the start of fintech hype, how many fintechs offer credit cards? For all the hype surrounding online P2P lending, most P2P loans are issued
by traditional banks. There are nonbank mortgage providers like Quicken but, despite the fact that they've been around for ages, they haven't disrupted the banking industry.
A few years ago, finsurgents were talking about breaking banks. That didn't work. Then they pivoted their model and started talking about providing technology, without which they claimed banks will collapse. That too didn't work. Then they changed their
tune to partnering with banks. The jury's out on whether that will work.
We live in an Apple free household. After buying two Apple proucts and having appalling after sales service, we have never purchased anything from them again. It is all very well providing innovative products, but customer service is a neccessity if you
want to retain customers.