I was watching Anwar's Forbes podcast recently, and it reinforced something I have believed for a long time: every industry eventually comes full circle.
Take entertainment, for example. The ultimate goal for many skit makers and digital creators is to break into Hollywood, or whatever the equivalent is in their own country. At the same time, many established actors are now creating skits, YouTube videos, and short-form content just to stay relevant and connect with their audience.
The same thing is happening in fintech. Most fintech companies are trying to become banks, while traditional banks are busy integrating fintech products and experiences into their apps. The line between a bank and a fintech is becoming thinner every day.
I have also noticed the same pattern in hospitality. Most hotels I have stayed in now try as much as possible to make you feel like you are in an Airbnb apartment by offering kitchenettes, living spaces, and a more homely experience. On the other hand, many Airbnb hosts are upgrading their apartments to provide the comfort, consistency, and service you would normally expect from a hotel.
It seems that every industry starts by trying to disrupt the existing players, but after some time, both sides begin moving towards each other until they eventually meet in the middle.
In finance, I think the reason is quite simple. Banks naturally enjoy stronger customer loyalty and much lower churn rates because they own the primary financial relationship with the customer. That makes it easier for them to introduce new products like investments, insurance, lending, payments, and wealth management to customers who already trust them.
Fintechs, on the other hand, usually have lower customer loyalty because many of them solve just one problem. Once they add banking to their product mix, they become much stickier. Customers are less likely to leave, and it becomes easier to cross-sell more products over time.
At the end of the day, both are chasing the same destination. Fintechs want to become banks, while banks are gradually becoming fintechs.
Maybe this is just how every industry evolves. Today's disruptors eventually become tomorrow's incumbents, and the incumbents survive by borrowing the best ideas from the disruptors.