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February 20, 2015updated 19 Aug 2016 4:01pm

David and Goliath – will Fintech defeat the banks?

Fintech investments to double this year globally.

By Alexander Sword

2015 will see global investment in Fintech double, according to a new report from Banking Reports.

The investment is forecast to rise to $19.7 billion this year, from $9.9 billion in 2014.

However, the report expects that while Fintech will remain a global growth sector, the rate of growth will slow to about 25 percent annually after 2015.

"This makes 2015 a major break-through year in Fintech and, in fact, in the entire history of banking innovations, which used to be based on conservative series of incremental gradual internal changes in the last 4,000 years," the report states.

The main growth in the market is coming from the USA which took 63 percent of 2014 Fintech investments. Europe is also an engine, contributing 18 percent, of which the majority came from London.

The whitepaper also claims that the sector does not represent an existential threat to commercial banks, predicting that cooperation between Fintech firms and banks will increase. By 2020, almost 40 percent of Fintech investments are expected to come from banks.

"The majority of the Fintech community is convinced that, as a result of the ongoing revolution, brick and mortar banks will essentially disappear. We at Banking Reports think differently: we are certain that the new status quo will be a state of productive coexistence. We understand that Fintech entrepreneurs often conceive their position as David against Goliath, but we think that it is rather a classic competitive cooperative coexistence situation."

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