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Banks v fintechs: better the devil you know

“Better the devil you know” is one of those phrases almost every language has a version of. In essence it means disruption is on the horizon and you can’t avoid it – so it is better to have at least some knowledge of the forces behind it.

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Of course, there’s a certain malevolence in the disruptor being a devil but there’s also a sense of hope. The phrase doesn’t suggest we’re all doomed, it suggests things are going to change.

"For fintechs, incumbent financial institutions represent a diabolical world in which they are trying to make their way.”

It’s a good adage for a financial world in which fintechs are appearing like mischievous goblins in every aspect of financial services. From the perspective of staid old banks, they’re little devils, out to cause havoc in an industry unchanged for centuries.

Yet there’s another perspective, that of the fintechs. For them, incumbent financial institutions represent a diabolical world in which they are trying to make their way. And for fintechs then “better the devil you know” can refer to joining those very banks they might once have had ambitions to destroy.

As we have been investigating at length in bluenotes, the challenge of disruption, whether by technology, by regulation or by non-bank competitors is the fundamental existential question of the day.

In our latest interrogation of the issue, bluenotes moderated a debate featuring two bankers and two fintech disruptors – but in a twist we had one of each on each side arguing “Do banks have a future”.

For the full debate, listen to our podcast here but after the event I spoke with the participants for their key views here.

And we also asked a very interested observer, ANZ chief executive Shayne Elliott, what his view of the future was. So do banks have a future? Spoiler alert: no but yes. Watch the video above to learn more.

Andrew Cornell is managing editor of bluenotes

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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