The financial landscape has been going through a transformation for quite some time now. Rising modernization paved the way for the fintech sector to grow. Demand for fast and efficient money management inspired neo-banks and other fintech stakeholders to take the industry by storm, and change the way consumers approach banking.

As most of the fintech companies focus on technological implementation and user-oriented banking, they’re becoming more and more appealing for modern consumers. However, on the other side, there are traditional banks that aren’t as fast to adapt to emerging changes.

Traditional banks could be associated with a king holding his throne. He has the power but can feel that the tension of revolution is rising. Of course, when it comes to the sector’s influence, it's beyond comparison, for example, in 2017, one of the leading consumer banks Revolut generated 17 million USD in revenue, while HSBC reached 66 billion USD in the same year.

Despite immense differences in annual revenue, traditional banks can't ignore the rising pressure of fintech. The financial technology sector has the advantage of attracting the younger generation by offering faster performance and a completely digitized experience.

Anne Boden, CEO, and founder of Starling Bank shares her opinion about the way traditional banks are adapting to modernization: "What (banks are) doing is taking a little piece of the action and using it to learn. (...) But in many cases what is actually happening is these smaller organizations, especially in the prepaid space, are being used for information and when all of the information is squeezed out them they're let go."

Although traditional banks are working their way to modernization by acquiring more agile companies, it’s not always fair. We can argue whether the actions taken are appropriate for the situation or not, but it's impossible to disagree that traditional banks need to shift their focus on enhancing their own products and services.

Transformation of Traditional Banks and Fintech Growth

Fintech boom is a result of the increasing demand for an improved banking experience. Consumers aren't satisfied with exorbitant fees, slow, and complicated operations. It also encouraged governments around the world to take action and shift their attention from pleasing big banks to consumers.

In 2018, the European Union's PSD2 (Second Payments Services Directive) came into effect. This regulation accelerated the rise of open banking by committing banks, from September 2019 onwards, to provide their users' information to regulated third parties through open APIs (application program interface). Traditional banks had a hard time accepting the directive, as it increased competition with other financial service providers.

Recent alterations in changing the financial industry showed that banks, although holding their power, shouldn’t ignore major issues that encourage users to look for more advanced methods to manage their money.

Problems with Traditional Banks

We can’t say that banks aren’t doing a thing to implement modernization, yet some of the problems make it hard to believe the process.

Customer support

Fintech companies play hard to ensure smooth and 24/7 customer service to maintain existing clients and attract new ones. However, bigger counterparts don't worry as much, which leads to poor customer service and user experience.

Big banks don't put UX in the first place and don't bother always to solve customers' issues. Yet, when it comes to modern users, they don't hesitate to shift to other alternatives if their needs aren't met.

Lack of flexibility

From payments to eye-to-eye consultations, big banks can be slow and inefficient. Online transactions can take hours, and if it's a weekend, even days. Not to mention, if you have an issue with your account, prepare to visit the nearest branch to figure it out.

Long queues, employees with the attitude, and baffling explanations don’t solve anything. On top of that, instead of turning attention to digitized experience, banks force their customers to their digital platforms by simply reducing numbers of physical branches and not improving customer service. And that's the unfortunate reality of traditional banking.

Small steps to modernization

This point closely correlates with the previous one, as most modernization processes are devoted to customer care. Fintech companies go through blood, sweat, and tears to meet the growing requests of demanding users. They work on improving digital money transactions, account management, fast payments, and customer support, while traditional banks lag behind.

The focal point of an established bank is not to fish for every new customer and try to keep the ones it has, but rather to hold its influence in a particular region. On top of that, with a million customers around the globe and numerous branches, it takes forever to digitize operations and satisfy everyone.

High fees

Many of us, at least once, have received a bank bill of a service we haven’t used but somehow got charged on. Yes, traditional bank fees are higher than the ones mobile banking is offering. Established stakeholders have the advantage of their status. Thus, increasing operation fees might cost a few customers, but overall will generate more money. So, they don't hesitate and charge for everything.

Why Didn't OSOM Become Another Bank?

Although traditional banks are facing many perils, they aren't going anywhere. At OSOM, we were considering the possibility of entering their territory, but instead, we realized that the world doesn't need another bank. What it needs is a beyond banking experience, and we can offer that.

If we have chosen to become another bank, instead of serving our customers, we would have to deal with fierce rivalry. That's the opposite of our core. However, we remained in fintech and now are working on bringing improved and transformational banking.

We want to ditch complicated and foreign user experience of traditional banks. At the same time, we seek to challenge neo-banks by putting all services in one app. So, you, as a user, can forget long and lousy conversations with bank support, and stop juggling between ten different apps, because we incorporated it all.


In times when you get bombarded with numerous budgeting services, and traditional banking doesn’t meet your growing needs, it’s vital to find the one app that can serve all your financial requests. OSOM is here to deliver fast and secure payments, digital money transfers, token and fiat exchanges with no additional costs. Don't believe us? Be the first to try it.