For quite a while, consumers have been content with the absence of technology in traditional banks. However, with Fintech increasing, banks struggle to keep up and provide customers with the technological advancement they desire.

The question is: will it be FINTECH VS TRADITIONAL BANKS? Could they also join forces to create new financial services that customers seek?

As per Statista, between 2018 and 2021, the amount of fintech firms in the EMEA region has nearly tripled. And in the last year alone, 254 billion dollars were put worldwide into nearly 18,000 fintech startups via Venture capital funds.

Fintech is a growing industry that blends financial services with technology to aid individuals and companies manage the flow of money and payments. But how long will it last?

This article will look at a close review of Fintech, the distinctions between traditional and Fintech banks, and the future growth of technology for financial services.

Let’s get started.




Fintech is a blend of “financial” and “technology.” It’s a term used to describe new technology designed to streamline and enhance the delivery and use of financial products and services.

Fintech helps businesses, business owners, and consumers manage their business and financial processes with the help of software. The technology is generally accessible via a personal computer or other devices like tablets or smartphones.

Fintech started in the latter part of the 90s in the late 1990s when Internet and e-commerce companies began to emerge. At the beginning of the 21st Century, Fintech was utilized in the backend systems of financial institutions to digitalize banking.

Since then, Fintech has moved its focus toward consumer-oriented services. It’s currently used in many industries, such as retail banking, investment management, fundraising, non-profit education, and financial services for people. Bitcoin and other cryptocurrencies are an integral part of the fintech revolution.


Which banks are they?

Traditional banks are financial institutions authorized to accept deposits and lend to businesses and individuals. Certain banks also provide other financial services, including wealth management, safe deposit boxes, and currency exchange.

Many kinds of banks, including retail banks, corporate banks, and even investment banks. In most countries, they are governed by central banks or the nation’s government.

What is the reason Fintech is increasing?


According to McKinsey, in an initial couple of months following COVID-19, the usage of mobile banking channels grew by 20 to 50 percent and is expected to continue to increase until the time that the pandemic is gone.

Another study by McKinsey finds that in digital banking, customers want an easier and more flexible experience. 71% prefer multi-channel interaction, and 25% would prefer to have completely digitally-connected private banking with a remote human support system available at any time. Consumer preferences for payment are also changing.

Financial companies must incorporate technology into their offerings to satisfy customers’ demands for speed, speed, and a more enjoyable user experience. This will allow them to deliver the smooth experience that consumers anticipate. If retailers such as Amazon allow customers to complete an order in minutes, they shouldn’t need an in-person meeting to open a bank account.

Fintech is helping bridge the gap between the traditional banking services that banks provide and what the modern-day customer has come to expect. The sector has seen significant growth. According to the Business Research Company, the global fintech market was worth approximately $127.66 billion as of 2018. It is projected to reach $309.98 billion, with an annual rate of close to 25% until 2022.


Can Fintech survive?

Fintech is often regarded as the future of banks and financial institutions. That’s why it’s not a surprise when the leading 50 fintech firms within Europe have raised more than $16.8B (EUR14.3B) of venture capital financing and are valued together at more than $92 billion (EUR78B).

Traditional banks have undergone a radical change in their operations because of the latest technologies, including machine learning, AI Analytics, and machine learning. Banks have also started to purchase fintech companies to improve their services. Additionally, fintech startup accelerator programs are growing in popularity, with some being run by banks, including ING and JPMorgan.

The competition is fierce, which means that some fintech firms will prosper while others may be struggling to survive. This presents a chance for fintech companies and traditional banks to work together and quickly adapt to the changing digital landscape.

Traditional banks and Fintech What’s the difference?


While traditional banks and Fintech each aim to offer seamless financial services for consumers and consumers, there is only one commonality.

Fintechs are regarded as the bank’s most formidable rivals. The banking system banks employ nowadays is made up of a number of outdated traditional methods and practices. It’s usually more time-consuming and unreliable than fluid and seamless. As the demands of consumers increase to demand things to be faster and more convenient, consumers are seeking solutions to finance that meet their requirements.

Traditional banks are falling behind in terms of technology and innovation, and Fintech is rising into the spotlight. Fintech may only have a small portion of the global banking system. However, consumers are increasingly turning to it to replace banks.

As per Statista According to Statista, between 2015 and 2019, the consumer acceptance of fintech firms and their products increased dramatically across the globe. In 2019 75% of the global population embraced some type of payment or transfer service.

We can dissect the differences between fintech banks and conventional banks in four distinct categories.

  1. The business model
  2. Regulations
  3. Potential for growth
  4. Risk factors
  5. The business model

The traditional bank and the fintech firms each operate as financial service companies. However, they have different methods of conducting business.

Structure and function


Fintech is an innovative, customer-centric approach that can simplify complicated financial procedures and makes them easier to use for everyone. The companies in this category employ minimal operating systems that are free of systems and can bypass certain regulations that are not in the best interest of consumers. Because of the more streamlined organizational structures of Fintech, it is easier to alter the way you work, invent, and build systems that aren’t working.

Fintech uses new technologies such as artificial intelligence, massive data, and cloud computing to provide customers with a unique experience. It’s focused on seamless service of personalization, speed, and relevance.

Fintech’s services are more accessible to consumers through streamlining complicated financial processes, especially for millennials and younger generations.

In addition, thanks to an improved business structure, fintech firms can offer services and products that are 10 times cheaper than traditional bank services. Traditional banks require the use of real estate and thousands of employees. However, most Fintech requires very little property and a smaller staff. The savings are transferred to customers.

Traditional bank

The old systems and the regulatory frameworks that banks utilize hinder their ability to use technological advancements promptly. Because of this, banks aren’t able to offer new services or products which address customer demands or concerns at the same pace as fintech firms. In general, banks are more process-oriented as compared to Fintech.

Customer experience


Fintechs are flexible and easily accessible. They function online, meaning users don’t require physical space to participate in financial products. Fintech is a great alternative. Users can sign-up using their PC or, in most cases, by downloading an app that is installed on their mobile. Fintechs provide 24/7 access to accounts, remote opening of accounts, rapid consultations, and better communication with customers. They’ve grown thanks to their focus on customer experience, which is the area where banks have been lagging.

Traditional bank

Most banks require that you are physically present to establish accounts or request financial assistance. However, not all banks have the technology to confirm the identity of customers online. This makes traditional banking less accessible for consumers, leading to poor customer service.



Fintechs are built on artificial intelligence, machine learning, and automation to work more quickly. The use of technology can also lead to fewer errors, better quality service, and quicker service in a smaller amount of time.

Traditional bank

Banks are struggling with their outdated infrastructure when it comes to the latest technology. These systems for banking are typically decades old, and they support the operations of the bank and its backend services across its primary duties. This includes opening an account and creating accounts, processing transaction advances, deposits, and much more. The legacy systems restrict the possibility of integrating with other systems and prevent banks from enhancing their infrastructure to provide new products, services, or experiences to their customers. This is why banks are falling behind.


Every financial institution is monitored in one way or another to ensure it is secure for users to use. However, Fintech tends to be more flexible and lenient, while banks are more strict.


Fintech companies don’t have a specific regulator. This is the reason the number of fintech startups has emerged. With no strict regulations, they can modify their business and conduct business as they please without a strict set of rules. This makes it much easier for startup companies in Fintech to operate quicker and be more responsive to customers’ demands; some are concerned about the risk of this industry. It depends on the country in which you live. The authorities have the power to regulate businesses in the fintech sector. Certain companies opt to be more controlled or compliant to make their clients feel more secure.

Traditional bank

Central or national banks govern banks within their origin countries. The bodies that regulate banks require them to adhere to the legal regulations, requirements, and rules that have been implemented to protect the people’s funds. Regulations on banking are in place to ensure the transparency of financial institutions and their clients.

Potential for growth

When comparing the two industries, growth is an important aspect. Traditional banks, as well as fintech firms, have the potential to grow dependent on various aspects.


The pandemic could be the main reason behind the digital revolution we witnessed in 2020. However, this trend is expected to be Fintech Magazine projects that 2021 will be a year of accessibility, inclusion, and sustainability. This will drive the development of financial technology this year and into the future.

Traditional bank

It doesn’t mean that banks are going to disappear. Traditional banks enjoy a steady market share, and with the growth of Fintech, they are adapting to changing consumer demands. This means adopting new features in Fintech, such as cybersecurity via digital technology, mobile payments, and peer-to-peer loan, which allows customers to take loans from a single or an entire group of people.

Risk factors

Although Fintech isn’t without risk, its benefits far outweigh the risk.


Because of the flexibility of regulations for Fintech, this industry is considered riskier. But, many people use it because it is the fastest, most affordable, and more ingenious, very user-friendly service and has additional features that aren’t available in traditional banks.

Traditional bank

The stricter regulations, of course, will result in less risk, making traditional banks a less risky alternative. However, if you want to stay competitive, reaching more customers and offering the best customer experience through technology for banking is crucial. Ensure that you’re using an application or service that’s well recognized and, if needed, certified. For instance, the payment gateway we use must be PCI DSS certified to ensure that consumer and merchant data is protected when processing credit card transactions…

Regulations for compliance differ based on the specific industry each Fintech operates in.

Are fintech companies and traditional banks collaborating?

Traditional banks and Fintech companies each function as financial intermediaries. Banks have been around for centuries, but they are required to undergo radical changes to accommodate the demands of today’s customers.

In terms of technology, Fintech offers users more sophisticated features and nearly all the services that banks traditionally offer. So, what exactly does their relationship now look like? What will happen shortly?

It’s unrealistic to expect people to change their bank accounts completely to Fintech. If Fintech and banks can cooperate and cooperate, they’ll make an impact. There are immediate advantages for both sides if they can collaborate.

Traditional banks profit from the agility and innovation of Fintech. They also increase confidence in financial technology due to years of loyalty to customers, business size, and a reputable network.

Here are a few benefits for traditional banks and Fintech working together:

  • If you compare Fintech to banks, the banks have massive deposits. If they cooperate, constructing more efficient finance systems is much easier for banks.
  • If fintech partners with banks, they’ll be regulated by the same institutions of government, which could help build trust.
  • Overall, the financial system will be improved due to the latest technology that Fintech can apply to the banking sector.

To meet the needs of the technology that consumers face in the present, banks are adopting new features in Fintech to enhance customer experience. Since the entire finance system continues to change and adapt, distributing resources to ensure digital agility is becoming an important issue for banks. The best outcome for both parties is long-term partnerships that combine technological innovation (Fintech) and trust and support (banks) with helping build the financial sector to meet the demands of the future of digital technology.

Chris Evan was born in Dubai and raised in Montreal. He studied Computer Science and was so pleased with computer languages. He began writing after obsessing over technology.

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