DECEMBER - 20198MY OPINIONINRIDING THE WAVES OF DIGITAL TRANSFORMATION IN BANKINGBy Maurice Lisi, Head of Multichannel and Customer Experience S/D, Intesa Sanpaolo [BIT: ISP]Financial institutions are riding the digital transformation wave to embrace the benefits that technology offers, while also hoping to keep up with fintech partnerships. Unfortunately, real and consistent progress in these transformation efforts continues to be slow and inconsistent.Most of you are regularly bombarded with FinTech, unicorns and start-ups, and at the same time, we see that there is a lot of blast surrounding the new digital banks that are popping up over the past years, with some bold claims around "disrupting" and "revolutionising" banking experience compared to the banks that we know today. There are players like N26, Monese and Revolut that are offering cool mobile app features, but honestly can we consider this a real banking disruption? Let us dive deep into the attractive buzzwords related to the banking transformation by looking at some figures. In 2018, Revolut faced a net loss of $40 million on revenues of $70 million, doubling the level of losses it made in 2017. The cost of sales jumped 247% on card scheme charges and user acquisition. We can consider and accept that for such young firms', profit is not part of their core metrics, but at the end of the game, banks are still inside a "for profit" business.We have seen massive investments in FinTechs; last year alone, $ 111.8 billion dollars were invested in FinTech start-ups - more than twice the amount from the year before. We have seen thousands of start-ups doing interesting things around financial services, which are vertical in payments, lending, saving and investing. And what's interesting is that the breakout companies that are unicorns are founded by people who are very young, typically under the age of 40.Even if we assume that we are in a mature phase, disruption of banking services provided by neobanks, FinTechs and BigTechs is still at too early a stage to know whether banking transformation is going to be, and we should expect something that is more radical compared to the "disruption" Maurice Lisi
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