ARLINGTON, Va.—New payments and money transfer platforms such as Venmo and Stripe are keeping banking executives up at night, a new study reveals.
The survey by Promontory Interfinancial Network was conducted at the end of 2019 and looks at a broad range of issues bankers are keeping tabs on, including the global economy, central bank policy, and changing banking patterns among consumers, Banking Dive said.
“The survey findings don't anticipate the impact of the coronavirus on the global economy, but bankers' views on how their long-term competitive posture is affected by payments platforms and other rising fintechs would remain broadly relevant. Their global economic outlook would need updating, though, because of the deep and broad impact the viral outbreak is having on commerce,” Banking Dive said.
Four Categories
The survey gauged banker attitudes on four categories of fintech:
- Payments
- Specialty lenders, such as Quicken Loans and Kabbage
- Online investment platforms, such as Betterment and Wealthfront
- Crowdfunding or other direct to investor financing sources
The payments and money transfer platforms, which in addition to Venmo and Stripe include companies like PayPal and Apple Pay, are viewed as the biggest threat to brick-and-mortar banks because younger consumers are using them like ATMs, said Paul Weinstein, a senior policy adviser at Promontory.
‘A Lot of Nervousness’
"There’s a lot of nervousness, fear and skittishness," he told the American Bankers Association. "This is probably one of the areas where the financial technology sector has made some of the biggest inroads."
In the survey, 76% of the 543 bankers surveyed said they feared the payments and money transfer platforms. Twenty-one percent said they only had a little bit of fear of them, and only 3% said they weren’t worried at all.
The next biggest worry is over specialty lenders such as SoFi, Earnest, Quicken Loans and Kabbage, although most bankers don’t view the growth of these companies as a major concern. Fifty-three percent said they’re either no or only a little threat, compared to 47% who said they’re something to really worry about, Banking Dive said.