Banks are not facing an "existential crisis" from financial technology (fintech) challengers , as the digital chief of HSBC said.Some have debated
Banks are not facing an “existential crisis” from financial technology (fintech) challengers , as the digital chief of HSBC said.
Some have debated that financial technology companies can be a serious threat to established financial services insititutions. The topic was even framed as “David versus Goliath”, as small start-ups are supposedly able to undermine the dominance of big banks.
“I think the ‘David-Goliath‘ (debate) or the existential crisis debate is overblown.”, said Raman Bhatia, head of digital for HSBC in the UK and Europe, in an interview with CNBC (cnbc.com).
“There are many players that will co-exist and there could be many models that could build on top of the bank’s model and co-exist with what banks have to offer.”, as he elaborated.
Recently, there were questions over whether such alternative companies could weaken the position of traditional banks.
According to CNBC, several digital-only “challenger banks” such as Starling, Fridor and Monzo have gained popularity in the sector, and led to such questions being posed.
The CEO of Norwegian start-up Auka, a platform that helps banks provide innovative products and services, pointed out that institutions need to change their model and adapt to new developments like open banking, according to CNBC`s article published last week.
On a fintech conference in London, he said that there would be a difference between the banks that “continue to make incremental technology steps to just make their business more efficient” all the while operating “exactly the same”, and banks that “strategically fight towards the force of fintech”, as CNBC reported.
“We have customers, we have the trust of customers for more than a 100 years and we are investing heavily in and learning from fintech, partnering with fintechs and developing our own digital propositions for our customers, and the customers appreciate that.”, said HSBC`s digital chief.
As CNBC`s publication noted, he believed that HSBC is ready for the fintech challenge.