Once big banks crack the code of how to win millennials, star fintech unicorns will be crushed

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Big banks won't let fintech start-ups rule for long.

• The success of Revolut and investment platforms like Robinhood have highlighted the potential gold mine of millennials.
• Companies like Robinhood, Monzo, Revolut, and Acorns will move into lending, banking, payments and investing improving conditions for customers.
• Goldman Sachs, JPMorgan, UBS and Santander are among those that are also ramping up their expansion.
• This means at least one unicorn will implode amid rising competition and squeezed prices, Autonomous Next says.

Fintech startups beware, banks are coming after your customers.

If the giants of the banking world manage to crack the code of how to market to and serve millennials, that is. Should that day come, financial research firm Autonomous Next says, fintech firms' advantage will shrink and "at least one unicorn will implode."

The success of challenger banks and payment services like Revolut and investment platforms like Robinhood have highlighted the potential gold mine of millennials. Big banks have taken notice, with Goldman Sachs, JPMorgan, UBS and Santander are among those that are also ramping up their expansion.

"As a result, customer acquisition costs will rise and the digital model will become more competitive, as servicing costs commoditize at a cheaper price point," Autonomous said. While this is great for consumers, startups might feel the squeeze.

Revolut, a UK startup valued at about $1.7 billion, is growing rapidly both geographically and also in its offerings of services. The firm and its ilk are unlikely to go quietly. Revolut, for example, has a "punchy mission" to "turn the financial sector on its head."

Read more: Revolut, the UK's $1.7 billion star fintech, has big dreams as it takes on the American market

Goldman Sachs jumped into the space with Marcus, a digital lending offering for consumers. It launched in the UK late last year, and is touting a savings account that pays an initial interest rate of 1.5%. That's the best rate in the UK. (But Marcus doesn't have a mobile app, an odd decision for a bank hoping to attract millennials.)

High spending on acquiring new customers has increased the need to sell a variety of offerings to an increasingly digital audience of consumers. Similarly, new and emerging fintech companies will look to even more revolutionary methods of disruption to gain new audience away from video and virtual reality. These include native payment systems within digital experiences and even social currency for video gamers within chat streams.

The trend will spread beyond fintech as well. The pricing pressure that started in consumer finance, "will spill over into B2B banking, money movement, insurance, treasury management and product manufacturing," Autonomous Next said.

An inevitable outcome is pressure on profit margins as prices adjust, the firm said.

"For those companies that are able to re-design operations using a digital chassis, they will be able to compete on the margin with fintech unicorns. Those that are not should exit, or retreat into more bespoke, relationship-driven business lines."