Every fintech and regtech conference I have been to in the recent past, talks about the imminent apocalypse where traditional players will soon get replaced by the new challengers. Easier said than done, I would say.
While new challengers, online only outfits and even technology companies (pretending to be banks) lack the gravity of legacy systems, integration issues and regulation, they also lack the critical mass of customers, relationships and trust.
In the next few years, it will be interesting to see if the big boys shrink enough to achieve that agility or the new kids on the block grow large enough to achieve that critical mass.
However, the high cost of capital and customer acquisition is still clearly an issue for online lenders and the main reason for both high interest rates and a growing trend for fintechs to seek collaborations with traditional incumbents, not least in the corporate banking sector where a number of banks have already teamed up with online lenders.