Last week McKinsey published its 2017 Global Banking Annual Review, which is summarized in this Business Insider article. The headline on that article is the title of this post and is both accurate and an understatement of the risks of technological and relationship disruption facing banks. This was a major topic of conversation at last week’s Money 20/20 conference, of which K&L Gates was a sponsor and which drew more than 10,000 attendees.

Much of the threat comes from payment, micro-lending, information technology and other technology and services offered by prototypical Silicon Valley startups consisting of a small team of committed founders and engineers. At the same time, however, many of these startups provide services complimentary to those offered by banks or which are actually used by banks themselves to improve their customer experience or otherwise streamline operations. For instance, Blend has developed software used by banks to shorten the mortgage application process and has received significant venture funding.

Banks, of course, are not taking this lying down and have internal groups developing proprietary technologies. Many of the largest banks are themselves making strategic venture capital investments in startup companies to help them develop tomorrow’s banking products and services.  For example, K&L Gates represents the Wells Fargo Startup Accelerator program, which invest in fintech startups. Banks are also teaming up to form bank-owned consortia, which provide new products and services, such as the Zelle payments network and the R3 distributed ledger platform. Finally, banks are also frequently the buyer of choice when mature startups are sold, as evidenced by Chase’s recent acquisition of WePay.

The next few years promise to be a period of fascinating change in how we bank and use other financial services, as banks and fintech startups drive innovation forward both symbiotically and competitively.