What started as a venture capital-driven, primal scream against the perceived backwardness of traditional banks and financial institutions has run into problems that no other new technology has faced.

The vision of how enlightened and breakthrough technology would infuse and revolutionise bank operations, investment decisions and regulation was as scary and futuristic as implementing “Skynet” in the Terminator film series.

In 2014, investment banks took the unusual approach of either investing in or providing the funds for expanding fintech startups. Some pundits thought this was an industry admission that they didn’t possess a culture of innovation; they needed to bring in expertise.

But that hasn’t necessarily been the case. Fintech could be an elaborate public relations exercise, so that banks could appear progressive and innovative. Any innovation in back office process through a data stack and regime like blockchain will only be applied to the banking system on the terms of banks and regulators.

Disruption is the last event that any bank or government wants in the financial sector.

Encouraging startups is also a way for banks to buy a front row seat to observe tech developments, just in case they might be overrun by some troublemaking programmers who invent the fintech equivalent of the DOS operating system from a garage or dorm.

The last two years saw an expansion of incubators and platforms to cultivate fintech startups. And this year, I am observing clues in major fintech centres where leaders are quitting startups and bank sponsored vehicles.

Their private remarks reflect the frustration of encountering the intractable challenges that I wrote about a few years ago. Fintech’s problem is that it’s the most regulated technological area in the history of startups – short of the development of the financial equivalent of the atomic bomb. Government regulators are especially cautious.

The hope and dream of being able to disintermediate financial institutions and the entire industry is unrealistic given how much protection and restriction is needed to prevent another financial meltdown that threatens to cast a 1930s style depression across the world.

Robot advisors have not proved to be the revolutionary concept and model that they promised. Most feature overhyped and exaggerated artificial intelligence capabilities.

Their main competitive advantage is an elegant website and dashboard that is a lower cost way of servicing smaller accounts and new customers like millennials.

Banks have been shedding retail customers anyways so these are clients they only want when their net worth increases to the point of needing the full services of a private bank.

Besides BlackRock’s acquisition of the roboadvisor site FutureAdvisor in 2015 (valuing it between US$150 million to $200 million) other asset managers like Fidelity and Schwab believed they could accomplish roboadvisor front ends on their own.

So approaches and results are very mixed.

Five years into the VC funding of fintech, it’s time in the investment cycle to soberly examine which fintech startups can be truly called game changers.

For those in Asia, it’s time to examine your startup and decide if it’s truly revolutionary, just a copy, or a marginal and insignificant improvement over an existing process.

Few will survive and even fewer will prosper.

Peter Guy is a financial writer and former international banker