Banking’s Next Frontier: Surviving the Fintech Revolution

Banks on the Existential Cliff? The Start‑ups Are Leaning Into the View

We caught up with the brains behind Wonga, TransferWise, Funding Circle and their tech‑savvy allies—Robin Klein from IndexVentures, Errol Damelin from Wonga, Samir Desai from Funding Circle, and Taavet Hinrikus of TransferWise—at the roaring Albion Society event in London. The panel’s big question? “What is modern money?”

Why This Matters (and Why It’s Pretty Fun)

Traditional banks are being lashed with scandals and stiff competition from nimble, digital‑first challengers.
These challengers promise cheaper, faster and friendlier services—and that’s a hard sell for the big five.
But banks aren’t going away. They’re the backbone of the economy, like roads and power grids.

Key Takeaways from the Panel

Despite the hype, the experts agreed that a healthy banking ecosystem still needs the old guard—banks will likely resurrect in a decade or so, similar to how e‑commerce has evolved: the newcomers daubed the lights on traditional retailers, but now giants like John Lewis and Boots have jumped on the online bandwagon.

They also said: as long as the math works out, start‑ups can deliver gusto in areas where banks lag. For instance:

TransferWise offers p2p currency swaps at rates that beat bank brokers.
Wonga disburses payday loans overnight. Banks? They’re still on paperwork.
Funding Circle opens the doors for small‑biz lending to anyone with a bank card.

Samir Desai pointed out that the majority of small‑business loans in the UK still fill five big banks’ ledgers. In China, however, borrowers have a playground of choices.

What This Means for You

Expect a future where financial services are competitive and diversified—not a monotonous gold‑plate line of banks. Start‑ups will push the envelope on speed, cost, and flexibility. As banks catch up, you’ll see a 2020s landscape where old meets new, and you get the best of both worlds.

The Human Side of Switching

One quirky observation from the panel: “It’s like divorces happen more often than people actually leaving a bank.” Damelin clarified that loyalty isn’t the same as inertia. When you feel real, tangible benefits, DJs will play a new track and people will move on.

Gen‑Y: The Big Change Agents

Glyn Britton noted that Gen‑Y is finally stepping into adult financial responsibilities. Growing up around disgraced banks, they’re ready to shape a lighter, partner‑friendly banking world. The future could look like a bustling marketplace of fintech wizards—dramatically different from the cut‑throat, brick‑and‑mortar banks of past decades.