"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. At the intersection of traditional banking and modern fintech lies a simple but growing question: what actually drives sustainable value for banks today? 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?"
"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. SoFi is a case in point."
Banks and fintechs once competed mainly on user-experience features like smoother apps, faster checkout and rewards. Public markets and quarterly earnings prioritize financial fundamentals over product bells and whistles. Two primary drivers of sustainable value are deposit balances/net interest income and payment volumes with fee-based revenues. Payment growth and new revenue streams enable expansion, while deposit strength provides stability and predictable interest income. A hybrid model that expands deposits while developing payments, fee income and blockchain payment capabilities can balance stability with growth. SoFi serves as an example of this combined approach.
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