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Arival Bank: From Book to Bank in 12 months

The market starts talking about fintech bank – please, do not confuse this fundamental concept with online-, neo- or challenger banks! In principle, online banks provide an interface for opening and managing accounts and deposits, as well as issuing banking cards. However, the financial services spectrum is huge: transfers, micro-\P2P-\P2B-lending, crowdfunding and crowdinvesting, online-trading, personal financial management, etc. In the short term, no player can deliver 10 and more major products in a set for retail and SME clients. Every startup has its piece of the puzzle and piece of the “market pie”.

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Most exit strategies in the market look like “to be acquired by a major bank, telecom or Internet giant”, which by the way have a profitable core business (with other elements). Just imagine how many products (customers, turnover, etc.) will have a fintech bank built by combining 6-8-10 successful fintech services! It would be very convenient for customers, simplifying the problem of choice and improving the services combined together. Moreover, it would solve many problems of these fintech startups: their market share and “premium for leadership”, a variety of monetization methods, improved cross-sales, increased margins and profitability, integration of services based on new technological platforms (rather than old bank IT infrastructures!). It’s like the introduction of Tesla: a completely new ecosystem of modern services creating new consumer experience! But it’s not just an electric motor inside an old well-known car brand or other services like charging stations, without) dealer service and 24-hour customer support based on big data provided by an old market player.

One of the core differences in approach to financial services between banks and fintech lies in democratization. While banks have always been looking to control the financial services industry, with the rise of fintech, the situation has changed drastically. If we were to decompose a bank, there would be a fintech company that can substitute each service the bank provides. However, a single ‘problem’ remains – banks are still holding our accounts. So we still need a bank, but not for the reasons we needed it ten years ago. Over time banks may become sort of ‘warehouses’ bringing together fintech startups to serve each particular customer need.