As fintechs began to rise in the early 2010s, it was clear that the position of traditional banks in global finance was about to change. Discourse in and out of the industry focused on the chances of fintechs killing bank branches. While that is unlikely to be the case in the foreseeable future, fintechs have evidently gained a substantial market share from traditional banks, forcing them to close their branches in droves.

Banks vs fintechs: Depth or breadth?

For about 15 years, traditional banks have maintained an annual streak of net branch closures. In the first ten months of 2023, US banks shut down 2,118 branches nationwide. In 2024, there were over 900 closures, and within the first 13 weeks of 2025, more than 320 bank branches were marked for closure. At this rate, one might wonder if there will be any bank branches left in the U.S. in the next few decades.

The truth is, fintechs are not here to drive banks out of existence. Such notions oversimplify the impact of fintechs in the global financial industry.

Fintechs have been gaining an advantage in the market simply because they leverage advanced technology to offer more convenient, affordable, faster, and more accessible financial services and products.

A key factor is that while traditional banks often attempt to take an all-in-one approach, fintech firms take a customer-centric approach, typically focusing on a key financial service and doing everything right to ensure that all service provisions in that direction are perfected.

By focusing on a single key customer need, such as payments, remittance, lending, savings, or budgeting, fintechs optimise their resources for maximum outcomes in those markets. Streamlined service provision ensures a superior user experience, a crucial factor that attracts and retains even more customers. The traditional banks’ jack-of-all-trades approach, on the other hand, puts a lot of strain on their resources across multiple fronts. 

The rise of fintechs in the remittances market

There is no doubt that fintechs have been consistently giving traditional banks a good run for their money in various financial markets.

However, fintech dominance in the remittances market is so extensive that a 2022 IMF publication argued that there is no better landscape for assessing the disruptive impact of fintech on financial systems than the remittances market.

And that much is true. The positively disruptive effects of fintechs are most visible in the digital remittance market they carved out, which is expected to reach $273.49 billion in transaction values by the end of 2025.

For decades, traditional banks and financial agencies dominated the remittance market with significantly high transfer fees and long waits, with customers having to wait three to five business days for international transfers to get to the recipient. Cross-border money transfers were both costly and inconvenient for customers. Banks maintained their significantly high fees and bureaucratic processes, as they have been longstanding features of their systems. In a sense, why fix what’s not broken?

But the truth was, a lot of things were broken in the old remittances ecosystem. It took fintechs coming into the picture for people to realise how bad they had it and for banks to acknowledge the shortcomings of their cross-border transfer systems. 

The imperfect traditional system

To understand the shortcomings of the traditional system, you first have to understand the basic principle and need for remittances.

Fundamentally, remittance systems are about processing direct money transfers between individuals across borders.

It is nearly impossible to discuss remittances extensively without mentioning those who send them the most. That is, migrant workers.

There are two things to note in this context:

• The socioeconomic factors or crises that compelled the migrants to seek better living and working conditions in another country, and
• The need to provide financial support to those they left behind at home, to improve their resilience to those socioeconomic factors.

With these considerations in mind, remittances, even when scheduled, are a matter of urgency. People need to receive the money as soon as possible to pay for food, rent, debts, business, or healthcare. 

Remittances are so crucial to family units that even during the financial crisis that reduced migrants’ incomes, most migrants cut down their personal expenses and continued to send money back home. They were trying desperately to make things better, but the high costs and inefficiencies of the system were still a burden to the customers, while banks report huge annual returns.

Transforming an imperfect system

Given the background, it made sense that when fintech money transfer providers entered the remittances market with far cheaper and quicker remittance services, customers didn’t think twice about embracing the new solutions.

From the get-go, fintechs addressed the shortcomings of the traditional remittance ecosystems that were a burden to customers. For one, fintechs leveraged advanced technologies to digitise every aspect of remittance processing, promptly removing or improving all the manual and often redundant bank processes to establish convenient and instantaneous cross-border transfers. More so, being digital and improving most of these processes translated to considerably lower overheads for the fintechs, which meant cheaper fees for customers.

With fintechs now at the helm of the digitalisation of the remittance market, the market has continued to grow at an exponential rate, bringing financial inclusion to previously unbanked consumers around the world. A market that is expected to capture about 18.83 million users by 2029. For context, that’s about 6% of the 304 million international migrants worldwide recorded in 2024.

Although banks, in recognising the benefits of the fintech approach, are attempting to embrace or absorb fintechs in the remittance market, fintechs could retain the upper hand across the board.

Explaining the fintech advantage

Consumers prefer the convenience, affordability, speed, transparency, and global reach that fintechs offer.

Now, the question is: how and to what extent may fintechs outpace traditional banks across these metrics?

Convenience and accessibility

Through innovative digitalisation, fintechs ensure that customers can access all their remittance needs through their digital services. There is no restriction on when they can make a transfer, and customer services are typically online 24/7. Additionally, most fintech providers allow you to schedule transfers. 

Affordability      

Globally, traditional banks are known to charge high fees on remittances.

The World Bank finds that on average, sending remittances through banks may cost as high as 12% of the transaction amount. Fintech platforms, on the other hand, generally offer competitive fees that banks simply can’t beat. 

Banks often can’t afford to be that competitive. Major banks charge a $45 fee on international wire transfers, and that’s on top of other fees.

More so, the exchange rate markups by traditional banks also mean that the remittance recipient will receive less money than the sender may have calculated. 

Speed

SWIFT international transfers can take up to 5 days to reach the recipient’s bank.

Compare that to the nearly instant international money transfers offered by fintechs, and the idea of using traditional banks for sending remittances feels regressive. Even in cases where various factors in the recipient’s region slacken transfer speeds, fintech remittances still typically arrive within 24 hours. 

Transparency

Fintechs revolutionised the concept of transparency in the global remittances market, and the extent is identifiable across these two key features:

• Upfront fee breakdown: Fintechs usually present all fees associated with cross-border money transfers upfront, allowing users to see and understand the exact cost of the transaction before confirming it.
• Cost comparison table: Reputable fintech platforms provide cost comparison tools that allow customers to compare rates offered by other providers.

This level of transparency boosts customers’ confidence and trust in fintechs, further compelling potential customers to ditch their banks for fintechs. 

Global reach

By spearheading digital innovations at the intersection of grassroots financial inclusion, fintechs have accessed communities around the world that were previously underbanked, unbanked, or generally financially underserved.

To demonstrate, online money transfer services like BOSS Money provide home delivery and cash pickup services in thousands of locations globally. This means that customers never have to worry about how to send money across borders, even if they live in the most rural community.

It only gets better with fintechs

Although most customers have already pledged their loyalty to fintechs based on the above-listed fintech advantages, fintech companies remain relentless in their pursuit of revolutionising the global remittances market.

These efforts in new directions can be seen in how fintechs are using modern regulatory technologies to streamline KYC/AML processes, enabling faster onboarding and smoother global compliance.

Over the years, through operational iteration aimed at improving user experience and data protection, fintechs have been able to establish new KYC/AML systems with real-time analytics, advanced multifactor authentication, and even more powerful encryption. These compliance initiatives are helping fintechs gain a stronghold across different stringent regulatory environments, while nudging global regulators to revisit existing policies and better coordinate standards across the board.

With these potential improvements, we can expect fintechs to further blur the lines across borders to reach more customers in areas even local banks have never considered.