chapter 01 HOW FINANCIAL INSTITUTIONS RESPOND? Recent changes in technology and population trends highlight on the main lessons that the FinTech wave has brought to banks: that the banking sector is also vulner- able to disruption. It should be noted that most of the potential innovations that may define the indus- try’s future are emerging from small technology companies and not from the large banks, who have the scope, resources and experience, allegedly ‘an ace under their sleeve’, when it comes to innovation. Nonetheless, is there enough room in the market for both: new innovator players and traditional banks and financial institutions? How is the latter being threatened in Latin America? Do they compete? Do they cooperate? Or do they do a little bit of everything? Until the beginning of the 2008 financial crisis, banks had enjoyed a degree of confi- dence and popularity that were crucial to the growth and positioning of their brands and, although that trust has not been eliminated completely, it has decayed around the world, mainly in the face of the needs and profile of new generations. As an example, the outcome of “Millennial Disruption Index” (Scratch, Viacom Net- work, 2015), states that 71% of US millennials said they prefer to go to the dentist rather than calling their bank; 68% considered that within five years the way people have access to money will change; and 70% stated they believed that forms of payments A TWO-WAY PATH 18