"There was a time when banks and fintechs competed mostly on bells and whistles: smoother apps, faster checkout, appealing rewards. But in the world of public markets and quarterly earnings, functionality gives way to fundamentals."
"Is it the buzz‑worthy growth of payment volumes and new revenue streams - or the old‑school strength of deposit balances and net interest income? The answer isn't as cut-and-dry as headlines might suggest; it's a mix of factors."
"Banks that are expanding their deposit base while also focusing on building fee-based revenue, payments, and now blockchain payments are pursuing a hybrid model approach. If executed carefully, this model can strike a balance between stability and growth, keeping deposits at the core while payments support expansion."
Banks and fintechs previously competed mainly on user-experience features such as smoother apps, faster checkout, and appealing rewards. Public markets and quarterly earnings force a focus on fundamentals over functionality. Sustainable value for banks depends on both payment volume growth and deposit strength, including net interest income. A hybrid strategy that grows deposit bases while building fee-based revenue, payments, and blockchain payments can combine stability and expansion. When executed carefully, that model keeps deposits central for stability while payments and fees fuel growth and diversification. SoFi illustrates this approach.
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