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Could retail banks be set for their very own Kodak moment?

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Could disruptive fintech startups spell curtains for an industry battling with reputation problems? This executive thinks otherwise.

The year Instagram was sold to Facebook, Kodak, the company that helped democratize photography in the 19th century, went bust. The iconic company that turned cumbersome, esoteric processes in the mid 1800’s into a consumer obsession, quietly fell by the wayside.

The lesson to take from the photography powerhouse’s untimely demise is summarized succinctly by Chief Sales Officer of Monitise, Alistair Crane, who suggests retail banks need to “stay sharp so they don’t have their own Kodak moment.”

And with $12.2bn in venture capital investment sunk into fintech startups in 2014, retail banks have become increasingly vulnerable.

Innovation is being cultivated in an industry with over 25 unicorns, robo-advisers that tell you where to invest your money, devastatingly cheap international transfer fees, and peer-to-peer lending sites.

Whilst disruptive fintech startups may be posing problems, the likelihood of them causing a “Kodak” moment in the near future is next to none.

Many are designed to remove banks from the equation altogether, yet despite a reputation in tatters after the 2007 economic downturn, retail banks remain in the driving seat.

“People [retail banks] certainly have to be weary” explains Crane, who maintains a belief that disruptive fintech startups won’t put an end to traditional banking.

“It’s [fintech startups] nibbled round the edges, there’s been no killer blow, it’s not the end of banking and there’s no dramatic change where everything ends tomorrow.”

Instead, he sees it as “far more of a positive than negative,” citing the “innovation from startups” as having injecting a new lease of life into an industry well overdue change.

Whilst some successful fintech startups deal in the billions, retail banks deal in the trillions.

And whilst disruptive fintech startups may be posing problems, the likelihood of them causing a “Kodak” moment in the near future is next to none, because by and large, they are tiny.

Fintech won’t kill banks, but it certainly may make them less profitable.

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