Commercial Banking! Is this the banks ‘Uber’ Moment?



In 2007 Commercial Banking became hugely profitable, and the market became increasingly competitive with much product development and many more new entrants. Since the recession many things have changed such as, the liquidity squeeze, PPI and interest, and aspects of new regulation have changed the market. The banks reduced their lending, activities, and ceased the sale of many financial service products and spent many years resolving the crisis.

The provision to all of the above is due to the fragmentation of the commercial finance market and the rise of Fintech. Anthony Jenkins, former CEO of Barclays predicted that banks are facing their own ‘Uber moment’ due to the rapid growth of such financial technologies. Just as Uber has challenged traditional taxi service companies, the growth of Fintech start ups are also beginning to compete with the worlds biggest banks.

What is Fintech?  
Fintech companies are a new wave of start up’s in the financial sector, who aim to provide services through the use of new technologies aiding with lending, payment processing and investment. As well as reducing the banks activities, the financial crisis left a large number of highly skilled financial service workers as ‘free agents’, giving them the opportunity to apply their knowledge in new innovative start ups.

Jenkins recently described the rise of Fintech as an ‘unstoppable force’ which will revolutionise the finance sector, leading to greater quality of service and having the potential to join the big banks as household names. Funding Circle are one that are nearly there already, and others well on their way to this status. There are estimated to be more than 100 peer to peer lenders and at least 50 small unsecured lenders and businesses that are also not far behind.

Here at Key we see a new lender very regularly, and as a finance provider we believe that the future of business funding may often be found outside of the traditional channels, but we continue to look at the high streets also. In other words the whole of the market place. Please let us help you take advantage of the ‘Uber Moment’ in lending, and look at all the options for your needs