Without a doubt, at least some of the buzz with FinTech has been associated with online banking (and recently, mobile only) banks, such as Moven and Simple. There are fewer startups in this space compared with either alternative lending or wealth management, yet it’s an important FinTech segment, according to Fintechblog.com.

For those less familiar with the US banking market’s historical peculiarities, due to the federal system and decentralized approach to regulation, for a long time it was fairly difficult in the US to operate bank branches across state lines. With the passage of the Bank Holding Act, and other regulatory changes, together with rise of the superregional banks, and later consolidation due to M&A, interstate banking came into being over the last three decades. Today the US has four big national banks – Bank of America, Citi, JP Morgan Chase, and Wells Fargo – yet is also is remarkable for its huge number of banking institutions (over 6,000) including local banks, credit unions, and the like.

First wave of online banks: Beyond consolidation, technology started to enable a lot of things at banks to operate at scale, including the ability to serve clients from call centers. In the mid to late 1990’s, the US industry also saw the emergence of online banking. While generally the banks, who traditionally have accounted for around 40%+ of the world’s technology spend, did not miss the rise of the Internet, there was a wave of startups that focused on disrupting traditional financial services.