GlobalBankingPracticeCuttingThroughtheFinTechNoise:MarkersofSuccess,ImperativesForBanksCuttingThroughtheFinTechNoise:MarkersofSuccess,ImperativesForBanksIntroductionTheFinTechMomentFinTechAttackers:SixMarkersofSuccessBanks:SixDigitalImperatives12581CuttingThroughtheFinTechNoise:MarkersofSuccess,ImperativesforBanksBankinghashistoricallybeenoneofthebusinesssectorsmostresistanttodis-ruptionbytechnology.SincethefirstmortgagewasissuedinEnglandinthe11thcentury,bankshavebuiltrobustbusinesseswithmultiplemoats:ubiqui-tousdistributionthroughbranches,uniqueexpertisesuchascreditunder-writingunderpinnedbothbydataandjudgment,eventhespecialstatusofbeingregulatedinstitutionsthatsupplycredit,thelifebloodofeconomicgrowth,andhavesovereigninsurancefortheirli-abilities(deposits).Moreover,consumerinertiainfinancialservicesishigh.Con-sumershavegenerallybeenslowtochangefinancialservicesproviders.Par-ticularlyindevelopedmarkets,con-sumershavehistoricallygravitatedtowardtheestablishedandenduringbrandsinbankingandinsurancethatwereseenasbulwarksofstabilityevenintimesofturbulence.Theresulthasbeenabankingindustrywithdefensibleeconomicsandaresilientbusinessmodel.Inrecentdecades,bankswerealsohelpedbythetwintail-windsofderegulation,aperiodusheredinbytheDepositoryInstitutionsDeregu-lationActof1980(DIDRA),anddemo-graphics(e.g.,thebabyboomgenerationcomingofageandenteringtheirpeakearningyears).Intheperiodbetween1984and2007,U.S.bankspostedaver-agereturnsonequity(ROE)of13%.Thelastperiodofsignificanttechnologicaldisruption,whichwasdrivenbythead-ventofcommercialInternetandthedot-comboom,providedfurtherevidenceoftheresilienceofincumbentbanks.Intheeight-yearperiodbetweentheNetscapeIPOandtheacquisitionofPayPal(oneofthewinnersofthisera)byeBay,morethan450attackers–newdigitalcurren-cies,wallets,networks,etc.–attemptedtochallengeincumbents.Fewerthanfiveofthesesurviveasstand-aloneentitiestoday.Inmanyways,PayPalistheex-ceptionthatprovestherule:itistoughtodisruptbanks.SiliconValleyiscoming.Therearehundredsofsta...
