Fintech startups are everywhere, but banks still own the customer, right?

Maybe not. An interesting discussion took place last week in Tel Aviv at Bank Innovation Israel between three bankers with differing viewpoints on this issue. The panel discussion, hosted by Paul Schaus, CEO of the consultancy CCG Catalyst, was about bank-startup collaboration, but the conversation quickly shifted to bank-startup competition.

Mariano Belinky, managing partner of Santander Ventures, said that banks must compete at the high standard set by Google, Amazon, and other tech giants, their neighbors on that precious piece of real estate known as the smartphone screen. Belinky made the point that banks should work with startups to improve the FI user experience, in order to keep pace with the expectations set by Apple, and the startups as well. To this end, Santander has invested in startups such as Ripple and Kabbage, to leverage their technology and services.

Gilles Gade, CEO of the young institution Cross River Bank, was swift to disagree. Cross River focuses on wholesale banking, and so does not often encounter the retail consumer, but its business customers have the same high expectations. “Let the startups be the front end,” Gade said, while the bank can take care of the pipes and payment rails. This is true even of big banks like Chase, he said. The battle for the customer experience, he argued, is a losing one, and indeed, it may already have been lost. Banks shouldn’t waste precious resources chasing the tech giants’ user experience — they have compliance to worry about and should stick to what they’re good at.

This was countered in turn by Michael Dooijes, head of strategy and innovation of Rabobank, who is in the somewhat unique position of working for a bank and, at the same time, being CEO of a bank-owned startup, MyOrder, a mobile payments venture. Banks still own the customer, Dooijes argued.

See his response to Gade in the video below.