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Banks have definitely overcome their legacy tech debt - if that's a debt. Not sure whether it's because they have great ideas and / or great people but it's banks with legacy tech that have accelerated change by introducing many of the pathbreaking innovations over the years e.g. Credit Card, ATM, MBS, CDO, CDS, and Algo Trading. If that sounds counterintuitive, it's only because parties with vested interests have tried to create a link between innovation capability and open systems. In reality, as many banks have shown, this link is highly tenuous. Capability to innovate is driven by many more factors than just whether a bank uses mainframe or open systems. Open systems purveyors may have better success with their legacy migration offerings if they appreciated Why Banks Can't Transform Legacy Applications and recast their pitch and offerings accordingly.

Sorry but your timescales are off by 10 years, if not more. I've personally sold truckloads of computers to Indian PSBs (Public Sector Banks) as far back as 1988 and many of my coworkers were doing that at least for 5 years before that i.e. since 1983. This included standalone and networked PCs for ALPM (Advanced Ledger Posting Machine), EAM (Electronic Accounting Machine), SWIFT Gateway, and Mini Computers for TBA (Total Branch Automation), which was the precursor for CBS. All of these were transaction processing applications, not just data collection / analysis. I'm not even counting the few Mainframes and high-powered RISC Mini Computers bought by Indian PSBs for ATM Switch, Credit Card Management and Project Finance Appraisal applications.

Fintech and Regulation go together as chalk and cheese. 

Fintechs Need Marketers And Lobbyists, Not Lawyers

Innovative Fintechs Don’t Need No PSD2 Regulation

Nope I disagree. Banks with mainframes have not lagged behind banks without mainframes when it comes to launching latest and state-of-the-art products. Arguably, they're ahead: Most pathbreaking financial products across the decades have been invented by banks on mainframes e.g. Credit Card, ATM, MBS, CDO, CDS, and Algo Trading. If that sounds counterintuitive, it's only because parties with vested interests have tried to create a link between innovation capability and open systems. In reality, as dozens of banks have shown, this link is highly tenuous - capacity to innovate is driven by many more factors than just mainframe v. open systems. If open systems purveyors stopped playing their broken record and making "it may be too late" kind of threats to mainframe-using-banks, they may have better luck at changing the status quo, which is currently Banks Can't / Won't Transform Legacy Applications.

When I was running the retail payments business in a previous life in 2007-8, there was a huge buzz around alternative payments. In the following 4-5 years, many alternative payments came and went / fizzled out / fell back on credit card rails e.g. carrier billing, mobile wallets, Dwolla, Tempo Decoupled Debit cards, etc. While deferred credit products like BillMeLater, Klarna and Affirm have made some headway, credit card and its rails have remained the most dominant form of online payments. 

Re. your opening line "...cards will fall to 41% by 2017." ICYMI, it's already March 2018.

IMO, RPA is going to push out the core transformation talk by a decade - yet another decade, that is - and will help banks once again defy doomsday predictions by finsurgents that banks with legacy core are doomed e.g. https://www.finextra.com/news/fullstory.aspx?newsitemid=31697.

Can you please throw some light on what "painting themselves in a corner" means and why "Banks accepting the current state of the back office and core systems and embarking on RPA-led business operations cost reduction" will suffer that fate?

Revealing post. At the end of my blog post Innovative Fintechs Don’t Need No PSD2 Regulation, I'd wondered what'd happen if PSD2 / Open Banking became two-sided and entitled banks to seek customer data from fintechs. Thanks to this post, I know now that the regulation is already two-sided - and covered many more number of companies than I'd thought.

There's no doubt that a checking account from a traditional bank has several friction hotspots. A company committed to superior CX like Amazon does have a great opportunity to take the CX of a checking account to the next level, with low hanging fruits in several areas e.g. (1) Frictionless account opening (2) Better transaction search (3) Improved traceability of payments. 

As for disruptive potential of Amazon's plans, it all depends on how Amazon plans to execute them: If it will acquire a banking license on its own, then it can disrupt other banks but, then, one bank disrupting another bank(s) is old news. OTOH, if Amazon is merely going to resell checking accounts of existing banks like JPMC, then, like SQUARE et al, Amazon will increase the reach of traditional banks and add to their revenues and profits instead of disrupting them.

TBH we've been hearing that "mobile self-checkout" is the future of shopping for several years. It hasn't become anything like that during this period. Now, in the day and age of Amazon Go, I think mobile self-checkout's days are numbered.

True dat @FinextraMember, I remember using self-checkout at Waitrose and other supermarkets more than 10 years ago in UK. I actually meant "mobile self-checkout" solutions aka Scan & Go aka Self-Scanning. TY for pointing out that there's a big difference.