The rise of neobanks, the acceleration of digitalisation after the pandemic and changes in user behaviour have brought back a recurring question: can fintech companies replace traditional banks, or are we looking at a model based on coexistence and specialisation?
What we have seen so far is not a complete replacement, but rather a gradual transformation of the financial system. In many segments, traditional banking remains essential because of its scale, regulation and balance sheet capacity, while fintech firms contribute agility, specialisation and a better digital experience. Rather than an abrupt revolution, what we are seeing is a reconfiguration of the model.
The Rise of Fintech and Neobanks
Fintech companies are technology firms that apply digital innovation to financial services. Within that universe, very different models coexist: payments, credit, investment, alternative finance, insurance and digital banking.
Neobanks are only one part of that ecosystem. They are institutions or platforms that offer banking services mainly through digital channels, generally without a physical branch network. Some operate with a full banking licence; others do so as electronic money institutions or through agreements with traditional banks. Their value proposition is usually based on more agile processes, a simple user experience and lighter cost structures.
This combination of digital operations, speed and ease of use has attracted users who are used to managing their finances from their mobile phones. However, user growth has not always translated into sustained profitability. Many fintech firms have shown that they can attract customers and grow quickly, but turning that traction into a profitable long-term model remains one of the sector’s biggest challenges.
The Strengths of Traditional Banking
Compared with the agility of fintech firms, traditional banking retains structural advantages that are difficult to replicate. The first is scale: large banks have strong balance sheets, access to wholesale funding and the capacity to take on risk in complex transactions.
They also maintain a highly relevant position in risk management, regulatory compliance and supervision. Decades of experience in lending, provisioning and regulatory control allow them to operate with a level of depth that is not always present in younger fintech companies.
In addition, traditional banks have not remained on the sidelines of digitalisation. In recent years, they have invested heavily in technology, developing their own digital channels and competing in terms of user experience as well. That is why, in many segments, they do not act as a replaceable player, but rather as a central pillar on which other digital financial models rely.
Regulation and Profitability: the Two Main Filters
One of the decisive factors in this debate is regulation. In Europe, both banks and fintech firms operate within an increasingly demanding regulatory framework, although not always under the same licences or with the same obligations.
The difference lies mainly in the nature of the activity and the type of authorisation. Some neobanks operate with a full banking licence; others function as electronic money institutions or through agreements with traditional banks. This affects issues such as deposit protection, the level of supervision and solvency requirements.
Added to this is the challenge of profitability. Both traditional banking and many fintech firms operate in an environment of tight margins and intense competition. For fintechs, the challenge usually lies in monetising a growing user base efficiently without relying too heavily on external funding. For banks, the main issue is adapting quickly to a digital environment without carrying the burden of heavy structures and legacy systems.
What Role Does Each Player Have in Real Estate Financing?
In real estate financing, the coexistence of traditional banking and alternative finance can be seen particularly clearly. Not all players compete to do exactly the same thing: in many cases, they perform different functions within the same transaction.
In Spain, banks remain the main player in developer financing, especially in the more mature phases of a project and, above all, during construction. According to the Observatory of Financing for Real Estate Development in Spain, bank financing accounted for 56%–58% of the total in 2024, while alternative financiers reached 30%–32% of investment, with a presence in both equity and debt.
That difference is not only due to size, but also to the type of risk each one assumes. Banks usually enter once the project has reached a certain degree of maturity – for example, when the land has already been acquired, permits are advanced or a significant level of presales has been achieved – while alternative financiers tend to have more room to operate in earlier stages, such as land acquisition, pre-development costs or more flexible financing structures. The Observatory also points out that external financing is concentrated in the construction phase (48%), while alternative players have greater relative scope in initial costs (28%) and land acquisition (22%).
In other words, in real estate development, the future does not seem to be bank financing or alternative financing, but bank financing and alternative financing, each one operating in the part of the risk spectrum and project cycle where it can add the most value.
Direct Competition or Inevitable Coexistence?
Rather than an open war, the current landscape points towards a financial system that is more hybrid, specialised and collaborative. Traditional banking retains a structural role because of regulation, balance sheet strength and financing capacity, while fintech firms bring agility, innovation and a focus on specific niches.
That does not mean there is no competition. There is, and it will continue to exist. But it will be more segmented than total. In some services – such as payments, current accounts or digital experience – competitive pressure is direct. In others, what predominates is collaboration, complementarity or even interdependence.
In areas such as real estate financing, this logic is already visible: it is not about one model replacing the other, but about different players occupying complementary positions within the same ecosystem. The transformation is not so much about the disappearance of banking as about the redistribution of roles within the financial sector.
