The answer to this logical but puzzling question is multifaceted. Keep in mind banks come in all sizes and each type of banks has strengths that FinTechs lack. Any combination of these points may explain why banks still dominate the market. FIRST MOVER ADVANTAGE - Banks have been around a lot longer than FinTechs so they had ALL of the market before FinTechs showed up on the scene. It's incredibly hard to displace an entrenched provider regardless of how slick your UI is.

These two examples illustrate the difference in speed-to-market with a simple product enhancement at a FinTech vs. a Bank. FinTech A product manager wants to make a small product enhancement on-the-fly. This isn't a must-fix bug, it's a small but NEW feature that's added to the the existing product. Let's say it's feature X that has four requirements - we'll call them requirements A,B, C, and D. The product manager writes a Use Case describing feature X and requirements A,

Commercial banks lack the ability to truly innovate because of the way they are structured and their culture. BANK STRUCTURE Commercial Banks core function is to lend money and that whole business model is predicated on loans being repaid. Failure to have loans repaid is not an option.  Consider this lesson taught on day one in every bank credit class taught to new loan officers. If a bank loans 100 companies each $1 million with a standard 1% ROA the bank earns $1 million o

Engaging with a MONOPOLY or OLIGOPOLY whether it's a vendor, partner, or strategic supplier is extremely difficult and frustrating. Here are some common negative traits of these organizations: Poor customer service Lack innovation & urgency Expensive Bureaucratic Resistant to change Monopoly or Oligopoly organizations - regardless of industry - manifest these 5 negative traits because they lack real competition and switching costs can often be exorbitant. Their dominant mark

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