The world of banking is at the verge of big changes that most incumbents are desperately trying to ignore. They see the change coming, they realize that their inactivity will cost them their existense but they are choosing to play dead. It’s easier to cut
the jobs and walk out with the bonuses then to start acting to still be relevant in 5-10 years. It’s easier to lobby its dominant position in the market than invest in its technology and people.
Let me try to explain, what I’m aiming at.
It doesn’t take a genius to understand where banking is going – you just have to look at the markets where most banks already bit the bullet and established themselves as tech companies that offer their clients a full range of services beyong just banking
– yes, super apps are one potential future of banking. Another one is Big Tech. Big Tech companies are entering banking as well and if the incumbents won’t be trying to take a step into the tech domain, they will loose out in the mid run, since Big Tech companeis
have only to sprinkle a bit of banking powder on top of their already existing ecosystem to rival even the most powerful banks.
The self proclaimed FinTech geniuses wonder about every step Revolut is taking, cause they are trapped in their small Europe/US centric world of financial services. Revolut is replicating the banking services that have been in use for the past 5-10 years
on the CIS and Asian markets. They build an ecosystem to get the most knowledge from their customers and take cuts on all the aspects of their financial lives, be it a taxi ride, a vacation or a pair of new shoes.
If you want to know what they will be builing next, just look at
Kaspi.kz, Tinkoff Bank and others.
Revolut has just unveiled their own
MVNO what’s hailed in UK as a New Era in Fintech, but that’s just one of the small steps to establish itself as a FinTech Ecosystem. The next steps will be:
- integration of travel
- all type of insurances
- ridesharing
- e-commerce etc.
The more services they add, the easier it is for them to get new clients through different channels, to lock them into their ecosystem and to upsell them on every product they offer. With every new service added, they leave the established incumbents behind,
because their offering doesn’t change.
The ecosystem idea is far away from being new and revolutionary. The companies like Apple have been successully running this business model for decades. Offer all everyday services through one interface and integrate them well with the underlying banking/payment
infrastructure and BOOM – you have very well running FinTech company.
The next step of the Super App is to enter the Big Tech market and the companies like Revolut and Nubank are very close to it. The number of customers they have accumulated so far allows them to successfully start building the next Big Tech ecosystem with
cloud offering, website constructors, storage, compute, LLM models and much more.
Incumbents in Europe and US have to prepare themselves for big downfall if they don’t start building the ecosystems today.
