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“Banks that do things well are our allies, but banks that do things badly are our competitors. We are in the same sector and we should move forward together.” This statement by Alfonso Sainz de Baranda, from Ahorro.net, clearly summarizes the debate generated in the Ecofin Forum on financial startups, held at the BBVA Innovation Center to discuss relations between the most traditional financial entities and fintech startups.
Francisco Amián, from Deudae, considers partnership between both to be necessary to make the financial ecosystem grow in general. “Financial institutions are very fast to embrace technology, but they keep innovation in the financial world confined to this small ecosystem of fintech companies.”
But within that small ecosystem fintech startups are becoming real alternatives, which must collaborate with each other to grow stronger. “We need this environment in order to grow and we need a common voice if Europe is to be an ecosystem capable of competing with China and the US", says Amián.
For Philippe Gelis, of Kantox, banks think more in terms of “cooperation” than “competition”, although he makes distinctions about types of bank.
“There are two types of banks. The big banks are more Fintech oriented and want to learn, collaborate and be partners. But then there are the domestic banks that are very aggressive because they feel very threatened, knowing that they do not have the innovation capacity to develop on a grand scale. These banks are going to have a very hard time”, Gelis predicts.
According to Sainz de Baranda of Ahorro.net, a virtual adviser that helps users optimize and spend their money, although large financial corporations have innovation departments, since "profits at not usually seen in the short term," these innovation strategies are at loggerheads with the plans of the other departments. This happens because they are not thinking about customer loyalty, which can be gained with the use of all these innovative tools.
Alberto Gómez, CEO and co-founder of Coinffeine, emphases that “evolution is more positive than revolution” and he does not see traditional banking as a competitor. “We convert banks and payment processors into a bitcoin Exchanges”, and which, he thinks, makes collaboration feasible.
Therefore, he considers not only that collaboration between Fintech startups and banks exists, but that these “have an interest in this being the case”. This way of working to create new services with startups can occur in different ways "whether by buying them or by becoming their partners".
However, Paulino de Evan, of Finanzarel, believes there to be business lines in which fintech startups and the traditional institutions do compete directly because of “a flagrant conflict of interests”.
“Some startups, being vertical and very specialized, gain in flexibility over traditional banking, which moves in a slower, elephantine way”. That is why he emphasizes that traditional institutions are being forced to change internally.
Sainz de Baranda also calls for such a transformation in their structure and encourages banking to “change its mentality” in time, even if this requires a period of 10 years. “Banks are not involved in the world of innovation throughout their structure, starting at the top", and that is why, as fintech startups, "we can help them”.
At present what is being done is to make "small fixes", but banking "will continue to lag behind" until strategic decisions supporting innovation become something global in its structure.
If you are interested in seeing the Ecofin Forum concerning the world of Fintech, you can see a full rebroadcast of this event in Spanish:
By BBVA Innovation Center