Channel Conflict: The Impact of Fintech on Traditional Banking

Abstract

This article discusses the transformation of the global financial landscape brought about by the rise of financial technology (fintech). Starting as a vision to overturn traditional financial institutions, fintech has evolved into an influential sector, fostering innovation, and becoming an essential facilitator for large organizations. The article scrutinizes the so-called 'Fintech Tsunami' and its transformative versus destructive impacts on the industry. It presents the concept of hyper scalability as a future trajectory of the financial industry, evidenced by internet companies' rapid growth models. The advent of "Finance 2.0" firms that mimic these growth models is also highlighted. The article acknowledges the significant scalability differences between traditional financial institutions and Finance 2.0 companies, attributed to the digital revolution and untapped markets in emerging economies. The analysis concludes that this fintech revolution has primed the financial industry for significant transformations, promoting digitization and innovation. The channel conflict between fintech and traditional banking could potentially lead to a more extensive, technologically sophisticated financial sector.