Digital disruption in banking: who is going to hold the big card?

Banking is not currently an easy business; it has radically changed because of many factors during the last several years. Deregulation and digitalization have emerged shaping both the market structures, and the way banking services are produced and delivered to the end customers. Some of their effects include the growing evolution and diffusion of digital platform business models, where networks are increasing entry to the industry for more participants and providing greater business opportunities. Despite the potential benefits, it is fair to acknowledge that, for many industries and firms, the process of digitalization is a disruptor and constitutes a significant challenge to incumbents. This is because, overall, new disruptions are blurring the lines of demarcation between industries, which has reduced the importance of some banking in the customers’ daily lives. Under these circumstances, traditional banking has lost significance vis-à-vis other forms of financial intermediation and counterparts (FinTechs and BigTechs), that is also well positioned to leverage the open banking frameworks either they are market or regulatory-driven.