While fintech start-ups are gaining market shares in specific business lines thanks to aggressive pricing policies, many banks have either established strategic partnerships with them or have taken them over. This way, banks are integrating fintech services into their value chains in order to support their digital plans. The Big-Tech companies represent a much bigger threat for banks, due to their competitive advantages.
First, by using their platforms – Amazon is an example – they have access to unique real time information on the products, sales, and customer satisfaction levels of firms using their platform; they can observe revenues and market structure, estimating the firms’ profit-generating capability. They also hold information that they can use to infer consumers’ preferences and living standards.