Readers may have seen reports in Fairfax media this morning about a survey conducted by global accounting giant PricewaterhouseCoopers (PWC) on the potential of financial technology or ‘fintech’ businesses to disrupt conventional banking.

Reportedly, 95% of respondents believe that at least some of their business will be taken by fintech players in the next few years.

  • Two thirds expect fintech to put pressures on margins
  • 59% are concerned about losing market share
  • 53% fear higher levels of customer churn

The biggest and most obvious targets in Australia are the Big Four banks of course – Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB), and Australia and New Zealand Banking Group (ASX: ANZ).

With their cosy monopoly on everything financial-services related, it’s easy to paint a target on their backs. Automated financial advice, peer to peer lending, currency exchanges, mobile payments, and crowd funding are just some of the innovations on the way, and each promises either better performance, lower costs, or both.

So what’s a bank shareholder to do?  Abandon ship?

For the record, I am bearish on Australian banks. However, I also think that fintech will have a long, slow ramp to climb to gain traction in the Australian market. Australians are attached to their banks, and many forego better deals on home loans, superannuation, insurance, and a stack of other services for the simplicity of a ‘one-stop shop’ – despite evidence it can cost them tens of thousands of dollars extra over a lifetime.

With such captive customers, it’s easier to pass on higher costs, raise capital, and cross-sell a variety of financial services. A recent example of the banks’ market power was when they raised rates independently of the Reserve Bank not too long ago.

Helping their resilience to disruption is the fact that the banks have taken a stake in many of the businesses hoping to disrupt them. Westpac and Macquarie Group Ltd (ASX: MQG) in particular have been quite active in backing or arranging partnerships with fintech disrupters.

So while the big banks are set for disruption, they’re also in a decent place to resist it – perhaps through the simple expedient of buying their competitors. Smaller start-up fintechs, climbing uphill with limited capital, certainly aren’t guaranteed to hit a home run.

The technology that's going to REPLACE the Internet is already here...

Dollar for dollar, insiders are calling it one of the biggest new markets in the history of modern business... NOW is the time to get in on the hush-hush industry that could be poised for growth of over 4,463%+ by 2020... And the 1 ASX stock that stands to grow YOUR money right alongside it! Simply click here to learn its name.

Motley Fool contributor Sean O'Neill has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.