A growing worry for banks is that tech companies are coming for their business, the same way Apple became a music distributor and Amazon invaded retail. The money transfer company TransferWise represents some of those anxieties: It offers cheaper foreign-exchange rates than banks typically do (and, if you’re keeping score, does it without blockchain).

The London-based fintech unicorn is expanding into other services, like debit cards. One of the things that’s kept tech firms out of the finance business in Europe and US is the sheer weight of regulation in the sector.

Banks may hide behind this thicket of industry regulation for protection against tech companies, which could “steamroll” parts of the industry, said Bill Winters, chief executive of Standard Chartered bank, at a conference in London earlier this week. This protection may not last: After five years of discussions, TransferWise is now the first non-bank to get access to the Bank of England’s payment systems, which will help it compete with the centuries-old financial institutions that have traditionally dominated foreign exchange.

This direct connection should speed up processing—making it instant in some cases—and cut costs. Consider the costs of transferring £1,000 to euros: Even though they compete with banks, tech companies like TransferWise still needed access to banks’ platforms because they couldn’t access central bank systems directly.

That meant a startup’s service and performance was in some ways only as good as commercial bank systems, according to TransferWise CEO and co-founder Kristo Käärmann. The Bank of England’s decision in July 2017 to allow non-banks to apply for the UK’s Real Time Gross Settlement (RTGS) will make it easier for them to skip over these intermediaries. Read more from qz.com…

thumbnail courtesy of qz.com