As Fintechs Grow Share of Mind, FIs Must Respond with Superior Experiences

A decade after the original neobank attack on established institutions played out, big banks find themselves in an interesting position. The direct competitive threat from these challengers hasn’t fully coalesced, but fintechs and new digital bank entrants are going all-in on aspects of their approach that have resonated with consumers. In this report, Javelin highlights some of the areas where fintechs continue to chip away at traditional components of provider primacy or leverage emerging opportunities that banks are well positioned to tap but have not yet. FIs can defend customer relationships and better leverage their traditional strengths by improving key digital capabilities and curating experiences to deliver more personalized value than fintechs are capable of providing. 

The biggest opportunities for FIs lie in four key areas: (1) AI-driven financial advice, which will require incumbents to drastically improve their chatbot capabilities; (2) better-integrated real-time money movement between institutions and person to person; (3) affordable and transparent cross-border payments; and (4) financial fitness features that come out of the silos and are presented in relevant digital flows.

Key questions discussed in this report: 

• How have the threats posed by fintechs and other non-bank providers changed over time?
• Where are fintechs and digital banks chipping away at what remains of primacy with specialized experiences focused on solving narrow financial problems?
• What capabilities and features do FIs need to shore up now to fend off emerging fintech threats? 

Companies Mentioned: 

Chase, Chime, Credit Karma, Nubank, PayPal, Revolut, Rocket Money, SoFi, U.S. Bank, Venmo, Wells Fargo