Generally speaking, it is up to market incumbents to rise to this challenge. In particular, banks facing questions about their business models should see the new wave of innovation as an opportunity – to reach out to new customers, to increase efficiency, to revamp their business models.
After all, they still retain economies of scale unavailable to small start-ups and intellectual capital unavailable to outsiders. FinTech may be exactly the shock the sector needs to restructure after the crisis. But policymakers also need to monitor developments closely. As more firms enter the market it will be important to ensure a level playing field between entities providing similar financial services.