Compared to a FinTech firm, innovation at a large bank can be less profitable because it may cannibalize existing activities. For instance, large banks have large networks of branches. Online activity can mean less activity at branches. To the extent that branches have large fixed costs, online activity increases the average cost at branches and hence makes them less profitable. As a result, establishing an online bank is less profitable for an established bank than for a bank that has no branches in place. The existence of branches can therefore slow down innovation.