Closing the Gap between Banking & Payments By Daria Rippingale (@DariaRippingale) For the past five years, the payments and banking industry has been in a constant state of flux. New entrants and well-known institutions are disrupting traditional services, shifting their focus to future-forward technologies in an attempt to solve the challenges of existing, incumbent infrastructure. While this offers a lot of promise, the disconnect between new financial technology and traditional banking infrastructure has caused a great divide. The financial services ecosystem has become a fragmented and complicated environment, with many different players vying to revolutionise the customer-finance journey, but very few providing a true end-to-end service. This means that for a company to modernise their front-end financial services, they’re increasingly working with more providers, leading to additional strain on technology resources and even greater difficulty to manage contracts and reconciliation. The industry is shifting to satisfy customer demand. Individuals and businesses need modernised financial technology services, but their fundamental banking needs must also be met. Fintechs have responded quickly to the demand for modern technology; developing tailored, fast and seamless solutions, but many are unable to meet the most basic industry needs – solid and reliable underlying financial services. A lack of integrated payment and banking networks, minimal compliance support and an absence of financial licensing detracts from the ‘future-forward’ nature of their customer technology. This is making fintechs a nice ‘add-on’ to the market but rarely a complete alternative solution to traditional banks. To that end, until fintechs and tech companies can provide integrated end-to-end services, traditional banks and acquirers will continue to underpin the market. There are new industry trends that are starting to shorten the gap between fintechs and traditional banking but the melding of these services will lead to a mass disruption of the traditional banking industry over the next five years.