In a bid to respond to competition from FinTech firms U.K.-based NatWest Bank has announced that it is launching a digital lending platform that promises fast loan decisions to compete with services that peer-to-peer firms provide.
In a report from Computer Weekly, the NatWest platform, known as the Esme platform, will offer unsecured loans to SMEs of up to £150,000.
The FinTech industry is quickly gaining ground on traditional banking services, which is seeing banks ramping up their efforts to keep financial technology companies at bay. By doing so, banks such as NatWest are launching their own digital lending platforms that provide customers with quick and easy loan applications.
This potential fear of what the FinTech sector can do is already seeing some questioning its regulation.
In January, Deutsche Bundesbank President Jens Weidmann stated that FinTech requires more regulatory oversight because of its potential to threaten financial stability and the banking sector. While former Group CEO of Barclays, Antony Jenkins, has predicted that within the next ten years the financial technology sector will greatly disrupt traditional banking systems. He believes that those employed in banks will reduce by at least 20 percent, possibly up to 50 percent within that time frame.
According to an IBM survey conducted last year, it found that from 200 global banks, 15 percent of those could be running blockchain solutions by this year.
The reason why so many banks are embracing the technology is down to the fact that lending and payments, which make up the industry’s core offering, are under threat. This figure is expected to rise to 66 percent by the end of 2018 while the remaining 34 percent of banks expect the adoption of blockchain to occur by 2020.
NatWest is not the only bank to implement its own digital platform.
Earlier this month, Thailand’s largest bank by revenue, Kasikornbank Pcl, revealed that it is introducing a new FinTech platform by the end of the year. Its goal is to produce faster, easier, and lower-cost online banking transactions.
While Netherlands-based bank ABN AMRO has teamed up with Dutch invoice management firm InvoiceSharing to develop an innovative FinTech solution for SMEs. It is hoped that this new tool will give small business owners 24/7 insight into their accounts.
Banks, however, are demonstrating their keenness to maintain their hold on the competition, but in order for both to flourish surely working together is a better option in the long run?
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