Can banks continue to dominate international payments in a digital age?

There is no shortage of FinTechs in the consumer market. From challenger banks, to remittance specialists, to P2P lenders, banks have undoubtedly lost customers to their more agile counterparts – who often focus on providing just one facet of banking, and are doing it exceptionally well.

Cross border banking is one area that has been relatively unaffected by FinTechs, but banks should not be complacent. FinTechs are snatching market share by delivering what corporate and SME clients want – greater transparency, lower costs, and improved clearing times.

FinTechs have learned a lot from the consumer finance market, too, and are beginning to apply the same tactics, evolving them to meet the needs of B2B customers. The consumer market is becoming more accepting and trusting of new entrants, not just in the financial industry, but also with disruptors in other incumbent dominated industries, such as energy. As consumers reap the benefits of great service at low cost, the expectations of services delivered to businesses also increases.

When looking at B2B international payments, there is not much preventing FinTechs from entering this space. While a business might want to retain its existing banking relationship for deposits and credit, transaction processing is an area where they can make significant savings, potentially weakening the customer relationship and lessening reliance on the incumbent provider.

So, can banks continue to be a dominant force in this area? We believe so.

Rather than competing with disruptors, partnering with them opens up new and profitable opportunities for both parties.

FinTechs are capable of providing banks with improved end user experiences and infrastructure, and benefit from not having to seek out a customer base from scratch, instead, taking a percentage from the services for which a bank charges. This enables banks to develop better customer relationships with minimal investment in technology.

We believe the banks that will hold the strongest position in the market will be those open to partnerships, allowing them to focus resources on delivering the best possible service to the customer, while core banking functions are delivered by financial utilities.


With insight and interviews conducted with heads of correspondent banking, cash management, and transaction banking at large and mid-tier institutions, our white paper ‘Re-drawing the map’, researched and published in partnership with Magna Carta, explores how banks can win in the digital age.

To find out more, download your copy of the white paper here.

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