The financial landscape has been experiencing transformation for some time. Rising modernization has paved the way for the fintech sector to grow. Demand for quick and efficient money management inspired neo-banks and other fintech stakeholders to take the industry by storm and change the way consumers bank.

As fintech companies continue to focus on technological implementation and user-oriented banking, they become more and more appealing for modern consumers. However, on the flipside, there are the traditional banks - which often aren’t as quick to adapt to the quickly evolving financial ecosystem.

You could think of traditional banks as the king on the throne of a quickly-changing land. He wields the power, but can feel that the tension of an impending revolution. Of course, when it comes to the sector’s influence, there's no question who currently holds the greatest amount of it. For example, in 2017, one of the leading consumer banks Revolut generated $17 million in revenue, while HSBC reached $66 billion in revenue 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 a better opportunity to attract the young generation by offering faster performance and a completely digitized experience.

Anne Boden, CEO, and founder of Starling Bank shares her opinion regarding how 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

The fintech boom is a result of the increasing demand for an improved banking experience. Consumers aren't satisfied with exorbitant fees and slow, complicated operations. It also encouraged governments around the world to take action and shift their attention from pleasing big banks to standing up for 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 still maintaining their power, shouldn’t ignore major issues that encourage users to look for better and more technologically savvy operators 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 work hard to ensure smooth 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 first and don't always bother 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, be prepared to visit the nearest branch to figure it out, which might be 30 minutes away.

Long queues, employees with attitudes, 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

But fintech companies are devoted to providing top customer care. Fintech go to great lengths to fulfill the requests of demanding users. They work to improve digital transactions, account management, allow for faster payments, and better customer support, all 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 one time or another, have received a bank bill of a service we haven’t used but somehow got charged for. Traditional bank fees are higher than those offered by mobile banks, but established stakeholders have the advantage of their status. Thus, increasing operation fees might cost a few customers, but overall, it will generate more money. This is why traditional banks 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, realized that the world doesn't need another bank. What it needs is beyond a banking experience and we can offer that.

If we chose to become just another bank instead of properly serving our customers, we would have to deal with fierce rivalry. But that would be in opposition to our core beliefs. We decided to remain in fintech and are now working to bring the world new, improved and transformational banking.

We want to ditch the complicated, foreign user experience offered by traditional banks. At the same time, we seek to challenge neo-banks by putting all of our 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 current times when you are being bombarded with numerous budgeting services, while traditional banking doesn’t meet your growing needs, it’s vital to find the one app that can host all of your financial activity. OSOM delivers fast and secure payments, digital money transfers, and token and fiat exchange with no additional costs. Don't believe us? Be the first to try it.