Large banks are considered “heavyweights” of finance that are in full competition to be better every day. We can give an example speaking in sporting terms (especially with the recent Olympic Games) how different banks (athletes) compete globally for the top positions in the financial market.
Established banks (medalist athletes on previous occasions) also want to prove their worth and positioning. Making the comparison of the bench with the Olympic games, it turns out that in the games, “few athletes” compete in “many events” and are focused on winning, if the competition is, for example, a pentathlon, and a test is won, this does not mean that has triumphed in all the competition.
Why is this comparison being made?
Established banks are generalists, while Fintech banks are specialists. In banking and Fintech, many competitors mostly do things very well in a single specialty, while older or older banks try to do “everything.” However, sometimes the results obtained are not the expected ones; they continue in force despite the passing of the years.
Comparing sports competition, the old banks are pentathletes, and the Fintech ones are like marathoners, cyclists, or swimmers (athletes of a single discipline). Although this comparison may not be as functional because athletes change every four years, the lifespan of an athlete in these disciplines is approximately twenty years. In comparison, the bench does not last four years but lasts about a century. Therefore, it can be deduced that there are no Olympics in banking or finance; there are only well-established big businesses and startups looking for a space to stay in the competition.
The benefits of the Olympics not only include the athletes but also include other aspects such as the income received by the venue for the organization of the event, in addition to the tourist and economic boost from which different people, businesses, and related sectors benefit. However, unlike the Olympics, in the case of banking, the venues of the games are not chosen “democratically” but are run by a single body or union.
Although it can be thought that the playing field is even for all competitors, in the case of the bank, the one who has the advantage is the entity that organizes these Olympics. To understand this point, you can imagine a “money and finance Olympics,” wherein each competition there are new companies and the entire event is run by the bank, which wants the new companies to work as quickly as possible, to then acquire more talent, points of view and ideas, however, in addition to organizing the event, the bank will also participate in it.
The government and the bank run the games to seize the winners and their talent. The banking system is essentially more like the International Olympic Committee than an athlete since traditional banking organizes the event and competes. However, different athletes and sportsmen compete; those who win in the end are the event’s organizers. Since in this case, they always do the event in the same city and are in charge of the same people.
Fintechs are at a disadvantage.Can they change the rules?
Although it might be thought that Fintech could be at a disadvantage in this hypothetical example, the truth is that little by little, there are beginning to be “external pressures” to modify how the “Money Olympics” are organized, seeking to make them more transparent, decentralized, fair and that the benefits reach everyone equally, in this way, each country, in addition to participating in the event, can also be part of its organization and access the benefits obtained as an organizer.
What do you think about this topic? Do you think the banking system acts as the international Olympic committee?
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