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The “Unbundling” and “Rebundling” of Banks and Fintech with Roxana Mohammadian-Molina, Blend Network

The amalgamation of finance and technology giving way to the unprecedented wave of financial innovations that was witnessed throughout the 2010s dates back to the aftermath of the 2008-09 Global Financial Crisis. That was a time when banks and many traditional financial institutions went ‘back to basics’, and decided to re-focus their capabilities and thus exited many areas of the businesses they had traditionally done but were now no longer considered essential.

Roxana Mohammadian-Molina, Chief Strategy Officer at Blend Network

For example, banks significantly reduced their appetite towards SME lending, trade finance lending and real estate development finance lending. At the same time, those banks and traditional financial institutions were carrying heavy legacy systems that left them at a significant disadvantage when trying to compete with their nimble, efficient and innovative digital counterparts. “As a result, we witnessed the advent of a new generation of companies that leveraged cutting edge technology to offer financial solutions that were significantly more efficient and effective than those provided by traditional financial institutions,” said Roxana Mohammadian-Molina, Chief Strategy Officer at Blend Network “These newcomers took away a lot of the business that banks were no longer willing or able to do. This is the “unbundling” of banks and fintech.”

This initial “unbundling” had many benefits when it came to the reshaping of financial services. Mohammadian-Molina said; “The clear winners were the end-users of financial services and financial solutions. The new digital challengers saw an opportunity in disaggregating the components of traditional banking and offered targeted solutions with better servicing to both retail consumers and businesses they were able to offer smart solutions and step in to take over segments that had been neglected by traditional banks in terms of offering.”

Competition means innovation

This harks to the advent of fintech in the first place, where traditional banks and financial institutions were set in their ways and felt no need to innovate until the increasing competition from fintech newcomers, now fully established in the present day and offering 24/7 access to financial services through automated user-friendly platforms and available via non-traditional channels such as social media.

“Suddenly, anyone could access personal finance management tools at a fraction of the price it costed a decade before through private banking,” said Mohammadian-Molina. “Anyone could invest a few thousand pounds in peer-to-peer property-secured loans and earn great returns from the comfort of their sofa, and customers with no or poor credit who were unable to get loans before, now could. So, all in all I’d say that all of us were winners of this “unbundling”. 


However, after the industry saw this “unbundling” take place, which allowed fintech to thrive and encouraged banks and financial institutions to increase their innovation, in recent years the industry has started to see a subtle change in this trend of newcomers competing with financial institutions, and there’s now a sense of change in collaboration in the water.  

Mohammadian-Molina explained, “It increasingly appears as though banks and FinTech firms are starting to look at each other from the corner of their eyes and winking. We’ve even seen open flirting and PDA from both sides. For example, JP Morgan CEO recently had flattering words for alternative lenders when he predicted a shift to non-bank lending and Starling Bank’s CEO Anne Boden said they are actively searching for lending businesses to buy. I do believe we may have reached a point where some fintech companies are becoming too important to ignore from the traditional bank’s perspective, and banks are certainly open to collaborations. So, in that sense, I do think that following the “unbundling” of banking and fintech we saw a decade ago, we are about to witness a “re-bundling” of banking and fintech.”

Collaboration is key

The impact of this now “re-bundling” is likely to be incredibly beneficial to the industry, fostering collaboration between fintechs and traditional financial organisations. “I personally believe that collaboration and partnerships is the name of the game in this business, and the more collaboration we see, the better it is for everyone.”

Mohammadian-Molina gives the example of the UK government creating the bank referral scheme in 2016, whose aim was to help businesses who have been unsuccessful in a credit application process with a traditional bank to obtain funding from non-bank lenders and alternative lending platforms. The scheme was designed as a partnership between traditional banks and fintech platforms within a regulated framework. Though according to the latest information it appears the scheme has not been hugely successful in referring borrowers to non-bank lenders, Mohammadian-Molina believes this is a great example of how fintechs and traditional institutions can thrive by cooperating with each other to help end-users. “In this industry, nobody wins until we all do. I think this is the way we must see it in order to create an ecosystem where everyone thrives and competes in a healthy manner.”

This “re-bundling” has come alongside a time of extreme digital transformation due to the Covid-19 pandemic. “I think many people will agree that 2020 will be recalled in the history of finance as the year that saw the equivalent of a decade of digital transformation, such is the speed with which the global fintech sector responded to demand at every level, from digital payments to digital wealth management. The Covid-19 pandemic gave fintech companies the chance to show what they are able to do and accelerated the uptake of digital financial solutions in ways hitherto hard to conceive,” said Mohammadian-Molina.

“The technologies being developed, tested and rolled out today are helping not only here and now, but will also shape the future of finance across the world in years to come. In that sense, I think the changes happening now will pave the way for a more consolidated market but not in the form of pre-2008.  The current courtship between both sides will lead to more formal engagements in years to come and we will witness some happy endings in the form of mergers and acquisitions between fintechs and banks”


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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