Traditional banks are key to the success of fintechs and won’t disappear, says Johan Gellatly, MD of Altron FinTech.
The banking and financial sector are rapidly evolving and South Africa has jumped straight into the fintech curve, growing the sector exponentially in the last decade. The rise of fintech companies has prompted widespread debate and discussion about the potential for them to take market share away from traditional banks .
There are various strengths that traditional banks hold over fintechs and, despite the disruptions caused by fintechs, traditional banks maintain dominance in crucial areas like corporate and investment banking, and their physical geographical reach to service larger enterprises will always be a requirement. Their extensive experience and resources make them indispensable for large enterprises requiring substantial investment capital to achieve domestic and global reach.
While both fintechs and traditional banks face vulnerabilities, traditional banks have an edge due to their extensive experience in building resilience against cyber threats. Consumers evaluating the use of fintech solutions must conduct thorough research to ensure adequate security measures are in place to protect them against the bad actors in the industry.
Regulatory compliance presents resource challenges for both traditional banks and fintech start-ups. Regulators play a crucial role in ensuring consumer protection and financial stability in the national payment system. While adapting to accommodate the rapid pace of fintech innovation, regulators must maintain stringent standards to safeguard the integrity of the national financial payment system.
Traditional Banks Financial Services Altron Fintech Johan Gellatly Personal Of Protection Information Act
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