As open banking trends become pervasive within a tight macroeconomic climate, incumbent banks are beginning to focus on new revenue strategies. Stirring the competitive pot are the latest results from Bank of England stress tests – hypothetical scenarios devised to ensure that major banks can withstand an adverse economic turn – that suggest that incumbent UK banks may be grossly underestimating the impact of FinTech competition on their profitability.
Possibly the result of too-big-to-fail thinking, some banks may not take the threat of new entrants seriously and, instead, assume a wait-and-see attitude as they partner with emergent players. However, with a pragmatic eye on future revenue potential, commercially savvy financial services providers are beginning to scrutinize their existing business models.
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