How FinTechs are shaping the future of finance

The FinTech revolution is shaking the pillars of traditional banking and forcing a paradigm shift in the world of finance. Faster, leaner and more intuitive digital solutions with fewer commissions are carving a niche in a sector that not long ago seemed untouchable.


The emergence of new digital technologies like artificial intelligence, embedded finance, blockchain and cryptocurrency has spearheaded the digitalization of financial services, reshaping the world of finance. Banking apps that function as a wallet of wallets, bringing together various functions and services in a single place to satisfy customer needs, exemplify the transition from analogue to digital banking.

FinTechs have gone from supporting traditional financial institutions to leading the way in an unprecedented race to attract an increasing number of customers, especially young ‘digital natives’, who have become tired of the complication, slowness, and exorbitant commissions we have come to expect from traditional banking.

This radical transformation of the banking services has been married to the exponential growth of private venture capital willing to invest in innovative ideas to change the current political, economic and social system. A seemingly unstoppable tsunami of technological alternatives to traditional banking and financial institutions, feeding on the exhaustion of the established status quo.

Agility and personalized customer experience

FinTechs like neobanks rely on the latest technology and take full advantage of their digital capabilities such as machine learning or cloud computing, leveraging online platforms and data analytics to generate social interaction, providing cards instantly, and offering personalized information and assistance to customers that value price and agility above all.

Traditional banks, by contrast, depend on legacy infrastructure which slows their administrative processes and ability to integrate with other financial platforms, one of the main drivers behind the trend towards increased mobile banking. While it is true that traditional banks have evolved in the way they function, automating some of their operations and integrating technology into their services, they still struggle against the superior technological prowess of their younger competitors.

While legacy banks have to cater to a wide variety of customers, offering a broad selection of traditional services expected from their customer base, neobanks can be more specialized and focus their efforts on specific consumer, community and business needs, thus providing tailored solutions beyond the scope of traditional banking.


Different regulatory frameworks

Given their focus on security and management of financial risk, traditional banks have more robust collateral requirements and rely on a strict regulatory framework provided by governments, central banks and financial institutions that is not mandatory in the FinTech ecosystem.

Lesser regulation makes it easier for these startups to innovate and adapt to the new financial trends and customer requirements. However, that is not to say that FinTechs are not regulated, like any entity that is involved in any financial activity, FinTechs must comply with several regulations, some of them country-specific.

Even though financial startups are generally smaller than legacy banks, they frequently operate and offer their services in many different countries. Therefore, whether they have a full banking license or an e-money license, they often have to comply with and face similar regulations as traditional banks.


Distribution and market penetration

The rigid organizational structure associated with traditional banking, In most cases, also relies on a network of brick and mortar locations that allow for access to ATMs, cash deposits and the flexibility of banking in-person, but which constitute a significant expense that is often passed to the customer.

In this context, banks are increasingly adopting online services akin to neobanks in order to reduce costs and increase growth potential. This is reflected in the steady rate of bank branch closures we have seen since the pandemic, which spearheaded a trend where the need and willingness of consumers to have in-person interactions seems to subside with every generation.

In other words, legacy banks are shifting part of their distribution channels, creating their own neobanks or partnering with some FinTechs in order to adapt their business model to the new market reality and imminent changes facing the industry. Such alliances and cooperation seem to be their best chance of keeping up to speed with evolving customer needs while not being left behind by the new market challengers.


11Onze is the community fintech of Catalonia. Open an account by downloading the super app El Canut for Android or iOS and join the revolution!

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  1. Joan Santacruz CarlúsJoan Santacruz Carlús says:
  2. Jordi MorenoJordi Moreno says:
  3. Manuel Bullich BuenoManuel Bullich Bueno says:

    Eines del S. XXI, q ens fan més fàcil el nostre dia a dia.

    • Xavier Vinolas EscodaXavier Vinolas Escoda says:

      Totalment d’acord, i en això es basa l’èxit de les fintech.

      2 years ago
  4. Francesc Estafanell PujolFrancesc Estafanell Pujol says:
    Francesc de Borja

    La modernització tecnològica porta a una agiltzació de les finances i això fa canviar també als clients

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