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Fintechs consider consumer needs more than banks

Peter Jones, Managing Director, PSE Consulting, speaks about PSD2 favouring new entrants over established players and how banks contend with new regulation.

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Comments: (1)

A Finextra member
A Finextra member 03 November, 2015, 16:14Be the first to give this comment the thumbs up 0 likes

FinTechs are much more in touch with consumer needs than the banks. History has proven that the banks have not done a good job in providing a value proposition where everone wins. Just look at how banks price their services. They charge $35 for an overdraft that costs less than $1; $30 for stop payments and credit card late payment fees in excess of $30 too. These high fees are representative that the banks are irrationally creating revenue. This same logic can be applied to foreign exchange too. Banks markup these fees by over 200%. Fintechs will attack these pricing weakness with better value propositions leaving the banks with a lot of loss leading products that do not pay for themselves. It is time for banks to change since the status quo is not promising.