Banks should be "scared sh*tless" of FinTech's

These are not my words.

They were comments Jamie Diamon, the CEO of JPMorgan Chase, made on an earnings call earlier in the year, which was then reported by CNBC.

And it's since become clear, that these were not casual one-off utterances.

In Dimon's annual shareholder letter he goes into a lot more detail about the threat, in the aptly titled section "Banks Enormous Competitive Threats — from Virtually Every Angle."

But to be honest, this should no longer be newsworthy.

The fintech revolution has been building momentum for a decade or more now and there are 70+ unicorns already.

In fact, I've seen a couple of analyst reports showing that banks have already seen 20% of their profits being eroded across various product channels due to the changing competitive landscape.

The majority of this impact has probably come from the impact of payment processors (e.g. paypal, stripe, square mastercard etc), new trading platforms (e.g. Robinhood) and x-border currency aggregators (e.g. Wise, formerly Transferwise).

But this is simply the beginning of a wider disruption.

Transformation is accelerating, with hundreds of neobanks offering cheaper, faster, simpler 'core' banking products such as current and deposit accounts, overdrafts and loans,

Take this chart showing how the top 6 UK neobanks have seen customer numbers grow over the last couple of years.

This sums to over 40 mill accounts being opened by UK citizens over the last 12 to 18 months.

So the threat is a very real and current danger and any incumbent CEO who can't see this, should in all honesty be fired.

The question CEO's should have been asking for years now, isn't how to protect market share against their incumbent competitors, but how they will survive the neobank uprising!

So, what can traditional banks learn from Neobanks?

I'll be exploring this theme with Craig Bond, the chairman of one of the worlds newest and fastest growing neobanks, envel.ai on May 25th at 11:30 CAT.

Before moving to Envel, Craig Bond was the CEO of Barclays Africa’s Retail and Business Bank, which is precisely why I'm looking forward to this interview so much.

He has had experience working for two organisations, in two very different geographies, servicing a similar customer base, with diametrically opposed approaches.

For example when Craig led Absa's retail division, I'd estimate he'd have been overseeing 20K staff, or more.

Envel on the other hand obtained a retail banking licence and is adding thousands of customers every month with....wait for it...just 16 employees (including Craig)!

It should be a fascinating discussion!

If you'd like to join the webinar, click here.

Oh...and one last thing. If you have a question you want Craig to answer, you'll be able to do that on the call too.

Hope to see you soon,

Stay safe,

Col