Fintechs are banking's Transformers. And banks aren’t ready.
Until very recently, banks grew by building new branches and marketing to people in the immediate vicinity. In New York, that's given rise to "four-corner banking," a branch on each corner of an intersection. The big banks will spend the next decade deconstructing what it took many decades to construct. Visits to retail bank branches are set to drop 36% between 2017 and 2022, while mobile transactions will rise by 121%, says CACI. It also predicts that 88% of all interactions will be mobile by 2022. Everyone with a mobile phone, not just millennials, demand instant information and immediate transactions. Too many banks are hobbled by decades-old batch systems. Meanwhile, Silicon Valley has forgotten how to spell the word "batch." Citibank's 2018 mobile banking study found that 91% of mobile banking users said they prefer using their app than visiting a branch, and 68% "of millennials who mobile bank see their smartphones replacing their physical wallets."