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Banks Face Fight-or-Join Decision With Tech Firms, McKinsey Says

  • Fintech startups are booming as bank profits top $1 trillion
  • McKinsey report offers plan to improve customer relationships

Global banks, seeking to protect billions in annual profits from encroaching technology companies, face a choice: Battle the upstarts or join them, McKinsey & Co. said.

Weak relationships with their individual customers have left lenders vulnerable to competition from so-called fintech startups and established companies like Apple Inc., the consulting firm said in a report released Wednesday in London. Banks must choose whether they’ll try to revamp their brands, give customers services they didn’t know they wanted, and hire more engaging employees or allow new entrants to do these things and just provide funding for loans.