By FINTECH Books Contributor, Hendrik Budliger
While Fintech is on the rise and many business models have emerged, some with better revenue growth and more breath than others, the definition of what is Fintech is still to come. Most current definitions rather describe use cases in which Fintech companies are, or compare them to more established financial sectors and players such as those with
B2C focus, lean processes, highly digitalised and without the legacy of a historical grown IT and organisation structure.
Involvement of users within the value chain to the extent that front end processes are outsourced to the client. Higher transparency of processes, business partners and costs with high scalability and convergence towards marginal costs in order to break up value chains and focus on smaller segments.
Fintech companies have regulatory advantages in comparison with more established brick and mortar players. The finance sector was successful because of a high level of trust that was gained by moving slow, having conservative opinions and focusing on a long term view. This did not necessarily attract the most innovative people.
Therefore innovation is rather developed outside of established players in the financial markets, by startups for which the regulators seem rather indecisive on how to approach them, while clients are largely standing on the side line to wait for more mature and integrated solutions.