Kevin Cohee, Chairman & CEO, OneUnited Bank, an award-winning CDFI and America’s largest Black owned bank.
Consumer expectations around financial services have shifted dramatically. Once content with paper statements, branch visits and long waiting periods, today’s customers increasingly rely on digital-first interactions.
Fintech companies have been at the center of this transformation. According to Plaid’s Fintech Effect survey, 79% of consumers are now comfortable using fintech platforms, compared to 87% who trust national banks. That narrowing trust gap is striking, given the centuries-long legacy of traditional banking. It signals that consumers not only want but expect agility, speed and user-friendly design in their financial experiences.
For traditional financial institutions, the message is clear: You don’t need to become fintech, but you can’t ignore the lessons fintech has taught the marketplace.
The Rise Of Fintech
Fintech’s growth has been fueled by one simple promise: making managing money easier. I’ve heard consumers say fintech helps them save time, feel in control of their finances and even save money.
Over 90% report that fintech has improved their financial lives in some way. The impact is especially powerful among underserved communities. The FDIC reports that 4.2% of U.S. households remain unbanked, with higher percentages in lower-income groups. Fintech, through mobile apps and leaner operating models, could help provide these households with a way to quickly open accounts, send money or access credit services once out of reach.
The industry’s agility is also reshaping financial innovation. Fintechs leverage big data, artificial intelligence and cloud computing to create personalized, seamless and fast experiences. They update products in weeks, not years. By contrast, traditional banks often move more slowly, bound by legacy systems and complex regulations.
Where Banks Still Lead
Despite fintech’s rise, banks are far from obsolete. Their advantages are significant. Banks operate under strict regulatory frameworks, providing consumers with safety, transparency and accountability that fintechs still struggle to match. They also offer comprehensive, holistic financial services—from mortgages to small-business loans to wealth management—under one roof. This scope builds deep, long-term customer relationships that fintechs rarely replicate.
Equally important, banks possess scale and stability. While fintechs thrive on speed, they remain vulnerable to shifting regulations and security risks. In moments of economic uncertainty, the reputation and reliability of banks still resonate with consumers.
Three Lessons Banks Can Learn From Fintech
1. Agility matters.
Fintechs use lean models to adapt quickly. Banks, often hampered by legacy infrastructure, can benefit from adopting more flexible approaches to product development and customer service. Faster testing cycles and digital-first launches will be critical.
2. User-centric design wins.
Consumers flock to fintech in part because the experience feels intuitive. Mobile-first platforms, clean interfaces and personalized insights are now baseline expectations. Banks must move beyond transactional apps and create experiences that feel as easy as ordering groceries online.
3. Transparency builds trust.
Ironically, fintech has taught that trust is not just about regulation, it’s about clarity. Clearer pricing, simplified terms and open communication foster loyalty. Banks, with their regulatory rigor, are uniquely positioned to amplify this strength through transparency that feels empowering, not overwhelming.
Collaboration: The Smart Play
Fintech and banks need not be adversaries. Partnerships can leverage fintech’s speed and innovation alongside the stability and scale that traditional banks offer. Many have already collaborated in areas like mobile payments, peer-to-peer lending and digital security. Collaboration offers fintechs credibility and regulatory pathways, while giving banks access to technology and new markets.
For example, fintechs specializing in reporting rent payments or improving credit scores can integrate with banks’ ecosystems, creating seamless experiences for customers. Together, they can deliver broader financial inclusion while maintaining compliance safeguards.
The Cost Of Standing Still
The greatest risk to banks isn’t fintech itself, it’s digital momentum. Gartner has predicted that banking-as-a-service (BaaS) is moving closer to mainstream adoption, reshaping how consumers engage with money.
In 2021 alone, banks shuttered a net 2,927 branches, a record year driven by industry consolidation and an accelerated shift to digital banking following the pandemic. Without adopting fintech-inspired practices, banks risk losing younger generations entirely to digital-first competitors.
The lesson: Evolve now, or risk irrelevance or obsolescence later.
Building A Hybrid Future
The way forward is not choosing between legacy and innovation but blending the best of both. Banks can embrace a “fintech mindset”: nimble, digital-first, customer-centered and transparent. This cultural shift requires rethinking risk, not as something to avoid entirely but as something to manage intelligently while pursuing agility.
At the same time, the stability, compliance expertise and holistic services of banks remain powerful differentiators. When combined with fintech-inspired design, they create a hybrid model that could define the future of finance.
The Next Chapter In Banking
Consumers have spoken; they want speed, personalization and transparency in financial services. Fintech has raised the bar, but banks still hold the trust and holistic framework to meet these demands at scale.
The winners in the next chapter of financial services will be those who blend fintech’s agility with banking’s stability. It’s not about leaving tradition behind, but about strengthening it with new tools. Banks that embrace this mindset won’t just survive; they will be the institutions that set the pace for the future.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?