Banks and fintechs need to converge, or crumble

PAYPAL'S US$2.7 billion acquisition of Japan's Paidy, which offers "buy now, pay later" services to online shoppers, is just the latest example of big money being invested in bringing financial services to consumers via the platforms where they spend their digital lives.

But this dynamic also throws up some difficult questions. Who is going to provide the payments, credit, investment and other products? How will they make money? And how will consumers be protected?

Judging by the headlines - and valuations - fintechs and blockchain-based decentralised finance players are stealing away the future of finance from banks. The regulatory system continues to be built around established banks, though, and they remain profitable - unlike many fintechs. If financial services are going to balance inclusion, innovation, user experience, profitability and consumer protection, these apparent competitors will need to converge - or else they will crumble.