Old vs. new: using technology to cheapen banking services

MoneyConf Transferwise

The MoneyConf panel 'Transparency and the true democratisation of finance' put TransferWise and Goldman Sachs face-to-face: The old bank versus the disrupting fintech company. Leading question: How can fintech always be cheaper in servicing customers?

TransferWise is now a so-called unicorn, a start-up company valued at over 1 billion dollars. Only five years old and already 600 people work at the company that smartly transfers money for its customers using technology as a backbone. Where its success comes from? “Pure focus”, answers CEO and founder Taavet Hinrikus the questions, asked by Clif Marriot of Goldman Sachs. “We focus on what we do best and only that. The money transfer market is huge, so that is purely what we focus on.”

Contradictory statements

Mr. Hinrikus says its success comes from the different and contradictory statements fintech and banks have. “Banks operate with the slogan ‘How can we charge as much as possible and still get away with it?’ We and other fintech businesses say to ourselves: ‘How can we charge as little as possible and still service and be profitable?’

Tech-first apprach

New fintech organisations tend to use a tech-first approach and highly value transparency for their users. He sees that the old-fashioned banks are using the fintech term to their win but also sees that his company is increasingly working with those banks to deliver its services.

Speeding up the process

Mr. Hinrikus says fintech today is still in the first inning, speaking in baseball terms. But, he says, “with banks using our services to their benefit, this process might speed up over time. I think the insurance vertical will be next in being disrupted by fintech, but always for the better.”

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