A neobank building and an old bank building facing each other

Opinion: Neobanks vs. Old Money – How Traditional Banks Can Cope

Matthias Gall gives his opinion on how banks can cope with neobanks.

Times change. We thought we had already seen the Last Unicorn in the 1980s. But in the finance industry, the unicorns are alive and well. And what’s more: They keep multiplying. N26 is one of the latest additions to the herd. The German company acquired more than 300 million dollars in its most recent financing round. Now N26‘s company value is estimated at 2.7 billion dollar.

Good preconditions to shake the digital banking sphere to its very foundations. And the traditional banks? They rely on strategies that were last seen in the 80s, too. Although they have the potential to do much more.

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Picture of an ATM which is out of service, a symbol how Google Pay threatens banks and fintechs

Google Pay: Nuisance for Banks, Nightmare for Fintechs

When pondering on digital transformation in the financial industry, one quote by Bill Gates comes to mind. Admit it, you know which one. It just fits perfectly, as we see tech giants leave their mark with emoney payment solutions like Google Pay and Apple Pay. Bill Gates said: 

We need banking, but we don’t need banks anymore

He said this in 1994. The millennial generation probably did not listen to his words back then – living the kid life requires full attention. But today, millennials resonate very much with Gates’ words. According to research by Global Banking Insights, at least one-third of all US millennials believe that they will soon live a life without banks. 

And they might have a point. The number of customers inclined to use online banking services has doubled over the last 10 years. As a result, the demand for digital finance applications increases — and quite a few banks struggle to deliver on that front. The internet is not their native environment. Fintech companies try to capitalize on this, using their technological expertise to disrupt the tried and true ways of banking.

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Fintech 2018, a look back, written next to a sparkler

Our 2018 Fintech Review – A Look Back

The new year 2019 is still young, but the old year’s legacy can still be felt. So a fintech end-of-year review is in order, as 2018 had many opportunities to make an impact.

365 days, to be exact, during which the fintech industry came up with unforeseen novelties and thrilling developments: The online payment, cryptocurrency, and digital finance sectors presented themselves as versatile and volatile. There is much to look at in our fintech retrospective, from the cryptocurrency decline to the new challenges and changes in mobile payment.

So let’s approach this giant of a year from different angles. We asked our three co-founders, what kept them occupied in 2018 in different areas of fintech.

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Smartphone using Apple Pay at a mobile payment station. The text next to it numbers four problems Apple Pay faces.

4 Obstacles Apple Pay Has To Overcome on the German Market

Mobile payment is convenient.

Just ask your chosen fintech aficionado.

They will point to frictionless paying. To fast access to monetary assets, wherever you are. To tech-savvy China, where almost one-third of the population pays via a mobile device.

And to Apple Pay . The Californian tech giant strives to ban the buck from our pockets and purses. The replacement: A slick mobile payment service.

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A flying rocket leaving the fintech year 2017 behind, thus symbolizing an end-of-year-review

Looking back: An End-of-Year Review for Fintech 2017

You know you had it coming.

Your calendar told you well beforehand: This year is going to end soon. Which means the symptomatical end-of-year reviews are springing up all over the place.

We’ll contribute. While waving farewell to the old year, we’re looking back on our last 12 months of business. What did we experience? What did we achieve? And, looking at the whole picture, how has the fintech industry been holding up in 2017?

It will be a fintech end-of-year review featuring balancr then. Here are our highlights of 2017:

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An electric brain in a jar, symbolizing artificial intelligence and robo-advisory, from which currencies and financial assets branch off

Robo-Advisory, Fintech and AI

Looking around the world, we can see a growing interest in the application of artificial intelligence, especially in financial services. Major fintech events like the Money20/20 US and the Hong Kong Fintech Week gave it the pole position, inviting machine learning experts and futurists to debate it before giant audiences. That said, the practical application of AI in fintech is not a dream of the future, but a present reality.

Robo-advisors, using artificial intelligence to analyze data and manage a user’s portfolio accordingly, have been around for a while in the financial industry. They promise easy accessibility and less need for human interaction, thus providing services at reduced costs. One step further and we enter the domain of trading bots. Such bots make actual business decisions based on previously accessed market data and gainings while circumventing human errors.

But how far have we come already? Let’s take a look.

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