The pandemic has helped to accelerate a number of changes in financial services as banks have been forced to shift to almost all digital overnight; banks and fintechs have partnered a lot more in recent years with banks relying on fintechs to provide them an avenue to innovate; but banks have not truly innovated and they are at risk of being relegated to a utility with big tech making a significant moved into finance; the open banking era is coming which will help to reshape the industry, fintechs will become less reliant on banking partners and big tech firms are in a position to potentially take the lead in distributing products; big tech have the capital and are not looking for the small margins that some fintechs rely on as a means of revenue; big tech want data and they could flip the equation on banks where they force them to end up paying for access to that data; Andrei Brasoveanu of Accel tells Forbes, “if Big Tech gets hold of the distribution side of the financial services business, then the manufacturers of financial services products will be utilities, providing low-margin financial plumbing.” Forbes.
