Abstract
Technology in financial services, or
‘fintech’, entrants and technology-media-telecommunication companies have
rapidly evolved into the traditional banking industry, offering
customer-centric, faster-easier-convenient-free, financial services. Digital-only-neo-banks focus on payment,
money transfer, lending for small-medium-businesses, and microfinancing,
facilitating technological innovation such as digital wallet and messaging
peer-to-peer transactions. Fintech banks generally lack scale and trust, unregulated
in some cases with credit or liquidity risk exposure, from the customers
perspective. Fintechs are increasingly perceived as a partner for a source of
value creation through technological advances and innovations to large,
traditional, and incumbent banks moving to accelerated digital transformation.
All innovative technologies which have laid the groundwork for major disruption
in the current digital banking revolution, set forth unimagined trajectory of
collaboration and consolidation as fintech industry matures. This paper updates
the digital banking transformation in fintechs and incumbent banking
institutions to show that access to future fintech trends will grow
significantly in coming years. The combined findings suggest that
digitalised-mobile-banking transitions emphasize the capabilities of banking
infrastructure for data sharing, connectivity, stability and cybersecurity and
standardisation of internal and external APIs as progress continues within the
regulatory framework of data protection as part of the privacy act and
open-banking directives.
JEL classification numbers: G18, G21, G24, G28