Abstract

This research is dedicated to ambitions of commercial banks in a form of a comparison of existing traditional banking models Versus FinTech solutions. Examples presented in the study are based on global market and forecasts are based on McKinsey and CB Insights reports. The hypothesis of this research imposed and suggested there are neither traditional model of commercial banks will remain at the constant, instead due to the mutual gain of the symbiosis the symbiosis commercial banks and FinTechs will respond to incentives. Research questions were: i) what are the ambitions of commercial banks in generating profits and how do they change in line with growth of the market of FinTechs? ii) to which extent traditional banking models and FinTechs solutions can be compared by assessed form the perspective of operations?; iii) which scenario out of tradition banking models, FinTechs only and a symbiosis between both is most likely to progress in the closest decade? Findings demonstrate that commercial banks’ financial ambitions continue to transform in line with product diversification they propose, commercial banks transform in their products and pricing will keep in balance between remaining competitive and profitable. The most realistic scenario in the future of commercial banks and FinTech solutions is the in-depth symbiosis.

Keywords: comparative analysis, commercial banks, traditional banking, FinTechs solutions, symbiosis.

JEL Classification: G21, G23, G29.

Cite as: Melnyk, M., Kuchkin, M., Blyznyukov, A. (2022). Commercial Banks: Traditional Banking Models Vs. Fintechs Solutions. Financial Markets, Institutions and Risks, 6(2), 122-129. https://doi.org/10.21272/fmir.6(2).122-129.2022

This work is licensed under a Creative Commons Attribution 4.0 International License

References

1. Betterment Official Website. (2022). Accessed: 03.05.2022. [Link]
2. Bucak, S. (2021). The democratization of private markets is unstoppable. Accessed: 21.05.2022. [Link]
3. CB Insights (2020). CB Insights – Fintech 250 2020.Accessed: 11.05.2022. [Link]
4. CB Insights. (2019). 2019 Fintech Trends to Watch. Accessed: 17.04.2022. [Link]
5. CB Insights. (2021). The Fintech 250: The Top Fintech Companies of 2021. Competition. Journal of Risk and Financial Management, 14, 614, 1-16. Accessed: 26.05.2022. [Link]
6. Dave Official Website. Accessed: 18.05.2022. [Link]
7. E&Y. (2017). Unleashing the potential of FinTech in banking. Accessed: 11.05.2022. [Link]
8. Harasim, Janina. 2021. FinTechs, BigTechs and Banks – When Cooperation and When Competition? Journal of Risk and Financial Management, 14, 614. [CrossRef]
9. Life Sreda Singapore Official Website. Accessed: 23.05.2022. [Link]
10. McKinsey & Company. (2020). FinTechnicolor: The New Picture in Finance. Accessed: 07.04.2022. [Link]
11. McKinsey & Company. (2021). The 2021 McKinsey Global Payments Report. Accessed: 05.04.2022. [Link]
12. Moro, R. (2020). FinTechs versus Traditional Banks: Business Model Scalability and Market Valuation. [Link]
13. Oxford Learner’s Dictionaries. (2021). FinTech. Accessed: 03.05.2022. [Link]
14. Scharaga, E. (2020). What is the Traditional Banking Model? Accessed: 16.05.2022. [Link]
15. Thomson Reuters (2021). Banking evolution: how to take on the challenges of FinTech. Source: Accessed: 03.05.2022. [Link]
16. Chen, Z., Li, Y., Wu, Y. et al. (2017). The transition from traditional banking to mobile internet finance: an organizational innovation perspective – a comparative study of Citibank and ICBC. Financial Innovation, 3, 12. [CrossRef]