Despite the emergence of digitally native fintech players, banks are far from being new to the field, says Motive Capital chief executive Blythe Masters.
«The luxury of believing in a sticky client base that will tolerate a high degree of inefficiency and lack of customer delight in their customer experience is long gone,» said Motive Capital CEO Blythe Masters at Credit Suisse’s 2021 Asia Investment Conference this week.
According to Masters, she believes that consolidation will come both among banks and non-bank players and that the coming five years will be the most intense compared to any other five-year segment in history.
«Enterprise demand for digital interaction and more efficient processing has skyrocketed,» said Masters who is also a proposed board member for Credit Suisse. «You are going to see fierce, ruthless competition in this space in the next five years than probably any five-year segment in history.»
Threatened by Change
In addition to economics, Masters stressed that aversion to change and further technological adoption within financial firms remain and it is beyond just psychological.
«There are those participants in the ecosystem who are threatened by those change whose roles have to evolve and some of those roles may evolve out of existence,» she said.
Banks: Not Done Yet
Still, Masters believes that banks will remain relevant in the financial industry in the years to come.
While some may fail to make the necessary investments to evolve and adapt to the new environment, she said that lenders «are nothing if not rational animals», noting that many have already developed their own in-house capabilities and also networks of ecosystems with external providers.
«Banks are by no means neophytes in the world of financial technology,» she said, adding that they also have a range of other advantages including strong balance sheets and customer trust.
Level Playing Field
Accelerated tech development at traditional banks aside, Masters also underlined that some of the regulatory advantages fintechs have enjoyed thus far may be coming to an end in some jurisdictions.
Aside from the effects of levelling the playing field amongst all financiers, Masters said that policymakers will naturally find interest in matters that affect the border economy such as financial market stability. And as such, this could drive regulators to seek more power to oversee relevant markets in which they currently have no authority.
«Regulators are going to be very motivated to broaden out their mandates and you are going to see efforts to do that in a number of different jurisdictions around the world,» she said, highlighting China as an example.
