Start-ups’ relationships with banks may have evolved from competition to collaboration, but the new players remain sceptical of banks’ awareness of fintech propositions.

At an event organised by the Dublin Tech Summit at the London Stock Exchange last week, the start-ups’ attitude towards banks was lukewarm at best. “The powerful forces in fintech are those who go it alone, creating brands that understand consumers and do something uniquely different. It can be very difficult to do so under a big banking umbrella,” said Derek Butler, chairman and CEO of Grid Finance, who thinks banks like to say they are embracing change, but “it is really quite meaningless”.

Barry Dowling, Transfermate’s CEO and co-founder, echoed Butler’s views, but admits that having a bank’s support can be invaluable. “Banks like Barclays have been dynamite. Some banks have led the way and others may choose to follow it.” Others, he added, are not telling the truth when they say they are embracing fintech.

First Capital’s chairman and co-founder Hazel Moore quoted a fintech report released by PwC in March revealing that over 25% of banks do not put fintech at the heart of their strategy. “I don’t think banks have really got it yet,” she said.

While banks count for roughly a quarter of investments into fintech enterprises, their contribution is dwarfed by that of tech giants, who are seen as competitors to both established and emerging financial players. “Tech companies have huge opportunities to come in and disrupt the space in a way that is difficult for start-ups to do,” says Moore. According to her, tech firms’ strength lie with offering digital-first propositions, leveraging on their data and customer base.

The challenge for tech companies is to transfer customers’ trust from dealing with their communications and internet searches to dealing with their finances. “There is a different consumer psychology in terms of social network and financing,” said Butler, “The Google and Facebook of this world have to proceed with caution, and I think they are doing that.”