Whilst most Fintechs are attacking the retail banking value chain, where the share of global revenue is highest, all segments are under attack according to a report published by McKinsey “The value in digitally transforming” credit risk management“. This chart which shows the footprint of Fintechs relative estimated share of bank revenue and client segments.
Whilst it may not be fully representative for any one segment or product, the chart is based on McKinsey’s financial-technology database which includes >350 of the best-known start-ups. “Commercial” includes small and medium-size enterprises, “large corporates” includes large corporations, public entities, and nonbanking financial institutions. The “financial assests and capital markets” includes investment banking, sales and trading, securities services, retail investment, noncurrent-account deposits, and asset-management factory.
The new competitors are beginning to threaten incumbents’ revenues and their cost models. Without the traditional burden
of banking operations, branch networks, and legacy IT systems, fintech companies can operate at much lower cost-to-income ratios—below 40 percent.
