Fintech will encroach the banking industry in the next 10 years. However it is interesting to see how the market responds to it and how the industry shapes into the future. Currently all the banks in a country are under the regulation of a central bank of country. Is such a model necessary? Or can global tech giants offer their services locally? How will the government react to fintech? These questions will define the direction of fintech startups.
Some of the answers are quite obvious. Like, the backend tech of a fintech company will be global. We already see trends of global dominance by companies like Stripe, Adyen and global card networks like Visa, Mastercard, Amex. However, none of these companies have technology or presence in each of the local markets. Banks still remain the front-end service providers to customers. Majority of fintech startups are focused in providing the last mile services to customers.
The other important aspect is the reaction of governments to fintech. It is unlikely that the governments would not control of the cash movement within the country. Instead they would play the role of watchdog through their central bank. It is also highly likely that the central banks will eventually agree to global standard for technology. But the services will remain local and the governments would ensure that they remain so. This will be done to protect the local uninformed citizens and also to disconnect from cyclical global financial crisis.
So, Fintech will be a local oligopoly market!