Fintech Vs. Traditional Banking

July 12, 2021
Makayla Santino

A fintech revolution is changing the landscape of financial services. Fintech is able to offer the same services as traditional banks, sometimes in more convenient modes than traditional services. In light of all the new options available to consumers, there is a question of how fintech and traditional banking compare.

Traditional banks offer consumers stability since they have been around for so long, yet they lack the amount of innovation fintech can grant. Innovation is an area that fintech companies can dominate. Though fintech only accounts for a limited share of world banking, it is growing at a rapid pace. Currently, fintech is growing at 24.8% and the industry is predicted to be worth $309.98 billion by 2022. 

A first point of comparison between fintech and traditional banking is their way of doing business. Fintech is a virtual space and customers can access services remotely. Through websites and apps, transactions and other services can be utilized by customers. With traditional banks, customers have to physically visit the bank location to open accounts and access their services. Customers must go in person so the bank can verify their identity and access their accounts.  

In terms of regulations, fintech still does not have a specific regulatory body. Due to a lack of regulation, fintech is easier able to make tailored changes to most efficiently service its customers. Though there is not an overall regulatory body, some countries have stricter regulations on fintech companies. Some businesses will even willingly request international watchdogs to provide more transparency and security for their customers. 

With traditional banks, there are central banks that are in charge of regulation for their country. These institutions ensure that banks fulfill any legal obligations that protect customers’ assets.

Growth is another point of comparison between the two industries. Fintech is one of the fastest growing industries in the world. Traditional banks have a stable presence within their countries of operation. To stay afloat and achieve some growth, these banks are adopting some newer fintech capabilities such as mobile payments and crowdfunding. 

When comparing the risk of each industry, fintech is considered to be much riskier than traditional banking. This goes back to the discussion of regulation. Fintech still does not have a specific regulatory body, therefore, the industry is considered to be risky. However, there is much demand for fintech services because of its convenience and ease. Due to the history of traditional financial institutions, they are less risky. These traditional banks hold large amounts of physical assets, allowing for customers to feel more secure. 

Fintechs and traditional banking differ in many ways. Though traditional banks provide security, fintechs offer convenience and ease of services, making them more appealing to consumers today. The world is going digital and customers now expect services to be offered remotely. Though regulation is still catching up, fintech is attracting more and more customers due to how accessible the services can be.




Finwin Technologies. “Fintech Vs. Traditional Banks: Cooperation or Competition?” Medium, 2 October 2020,

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