The Banking Paradox: even bankers want to move to fintech

This post is stolen from Philippe Gelis's (CEO of Kantox) blog on LinkedIn, as it adds more insight to my similar post last week:

4 years later, we are probably the most formidable competitor CaixaBank faces in FX. Hundreds of our clients were previously using them to exchange foreign currencies and were paying huge hidden spreads compared to the 0.09% to 0.29% range we charge at Kantox. We know for sure that we squeezed millions in profit from them over the last few years.

A few months ago it was Banc Sabadell who awarded us the start-up of the year award 2014, and in 2013 we were finalists at BBVA Open Talent’s “New banking”.

3 out of the top 5 banks in Spain have awarded us, recognising the incredible value we bring to our clients, based on an ethos of transparency, fair and consistent prices, and efficiency through our online FX management tools and features.

After receiving the award from Actualidad Economica and CaixaBank, I was waiting for my train back to Barcelona and wondering what might be the opinion of CaixaBank employees regarding that award. So I gathered the emails of my contacts from CaixaBank and sent them a very brief email informing them of the award. I attached a picture of the award (see below) and thanked the bank. Here are some of their answers:

We are very interested in businesses like yours. You are doing an incredible job with a great value proposition putting the client at the centre, which is exactly the opposite of what we do in the bank. You are leading the financial industry in the right direction"

Congratulations for the award and for the fantastic company you have built!"

Philippe, I just received your email. As you know, I work in La Caixa. Sorry, it is not my fault. ;) Do you think that one day I could visit you in Kantox to see it from the inside? Best”.

Maybe I am wrong but I started to think that more and more people working in banks are dying to move to the FinTech space.

So what’s next? We are still at a crossroads and banks are not sure yet if they should just give awards to the best FinTech companies, if they should build incubators to get an overview of what is happening in the market or if they should invest / partner with FinTech firms.

Which bank will be smart enough, with a long-term view to partner with Fintech and cannibalise some of its business in the short term to then surpass its peers in the long run?

If CaixaBank had invested in Kantox in early 2011, when Fintech was virtually unknown and when we were desperately looking for some money, it would now hold a large share in Kantox that would compensate (at least in part) the market share they lost to us.

While on the train, I then received an email from one of our clients saying, “It is a pleasure using Kantox. You are doing an amazing job and you have my complete trust. So much so, that if you gave me the opportunity I would love to invest in your company!”

Banks keep giving awards to companies in FinTech.

Bank employees want to move to FinTech.

Clients want to invest in Fintech.

We are definitely at a crossroads from which there’s no way back.

Ps. Just to be clear, this post is about the FinTech revolution and the passivity of the banks, despite the positive feedback of their employees. We have absolutely no interest in selling to CaixaBank.

This post is available in Spanish here.