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FinTech and banks: A revolution that never happened

Vol. 25, Iss. 7, JULY 2019

Received: 22 April 2019

Received in revised form: 20 May 2019

Accepted: 3 June 2019

Available online: 1 August 2019

Subject Heading: Banking

JEL Classification: G21

Pages: 1501–1513

https://doi.org/10.24891/fc.25.7.1501

Zver'kova T.N. Orenburg State University, Orenburg, Russian Federation
tnzverkova@mail.ru

https://orcid.org/0000-0002-6540-6154

Subject Over the past ten years, the media have been actively discussing the difficult relationships between FinTech companies and traditional banks. The former use the cutting edge digital technologies, big data analysis, aided by blockchain technologies, and this should have changed the banking world and open a new era of fundamentally new products and services. A decade later, however, the situation in the banking market has not significantly changed. FinTech companies have been unable to compete with banks, and the most successful ones apply for bank licenses.
Objectives The study aims to identify and systematize the most likely causes and problems that prevented FinTech companies to tip the balance of power in the banking market.
Methods I employ methods of comparison, expert assessment, and generalization.
Results Nowadays, FinTech companies and start-ups do not have significant financial opportunities to continue their competition with banks and reshape the banking market. They are forced to focus on narrow and low-margin areas. Unfortunately, their business models are intended for fast growth and early sale. Against the backdrop of a slowdown in economic growth, they should look for new breakthrough opportunities, arrange a sale at a cheaper price to banks, or merge with other FinTech companies.
Conclusions It is crucial for FinTech companies and startups to initially work out their business models and concentrate on creating artificial intelligence that generates new financial intermediation models involving virtual currencies.

Keywords: FinTech, FinTech company, startup, bank, model

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