Maybe it’s time to start recognizing that banks are no longer lagging behind pioneering online lending startups.

Many custodians have learned that if they don’t modernize their lending processes, they risk being left behind. At the same time, many startups have been stymied by some intractable advantages held by the banking industry, the most notable being significantly lower funding costs.

The result is an emerging competition between fintechs and banks which, until recently, were widely dismissed as being too slow to adapt.

“Banks are heavily involved in financial technology,” Bill Ullman, chief commercial officer of Orchard Platform, a New York-based data analytics company, told an industry conference last week. “I think that convergence is really there.”

Perhaps the most important thing to take away from Digital Lending and Investing, a two-day conference held in New York City last week, was the banking industry’s new openness to change. The conference, once dominated by innovators from Silicon Valley, this year featured presentations from Citizens Financial and Goldman Sachs, both of which place big bets on digital lending.

Certainly, fintechs have taken a considerable head start. Their share of the US personal loan market fell from less than 1% in 2010 to 30% last year, according to data from TransUnion.

But Internet-age businesses are also starting to learn that when banks compete online, they have significant advantages.

On the one hand, deposit banks have a significantly lower cost of funds than their venture capital-funded competitors. This advantage has allowed banks to lend at relatively low interest rates while achieving similar income margins.

Banks also have an integrated customer base, while online lenders often have to pay exorbitant prices to acquire their borrowers. Ironically, many of these internet-age businesses still rely on old-fashioned direct mail to sign up their customers.

“We’ve seen some businesses fail,” noted Brendan Ross, CEO of Direct Lending Investments. “In the long run, you’re either going to have a huge brand, and that’s going to be the reason people open these mails, or you’re going to be consolidated.”

Some online lenders are touting their loan underwriting methods as a competitive advantage in a crowded market, but speakers at the conference generally dismissed these claims.

“It’s very difficult to tell the difference between one online lender and another,” said Brendan Dickinson, a venture capitalist at Canaan Partners. “It is not really possible to tell the difference on the subscription.

Meanwhile, some banks are finding that building the technology platforms needed to run a digital lending business isn’t as difficult as it sounds.

“We built a fully digital bank from scratch in less than a year,” said Boe Hartman, chief information officer of Goldman’s newest retail banking operation.

Speakers at the conference predicted that some online lenders will fail, others will be bought out, and relatively few will become strong competitors for banks that have kept pace with the change.

Indeed, some banks are already benefiting from the struggles of startups. Goldman would have hired about 20 employees of the online small business lender Bond Street.

To be sure, not all banks share the benefits Goldman enjoys, including the ability to pay a high price for engineering talent. And while banks may be able to build their own digital lending platforms, many of them will struggle to match the customer experience built by major startups.

These are the reasons why some banks have decided to partner with digital lenders. At last week’s conference, RI-based Providence, Citizens announced that it has started providing small business loans online in partnership with New York-based Fundation Group.

“We strongly believe in the power of fintechs as partners,” said Brad Conner, vice president of consumer banking at Citizens.

Yet these partnerships between banks and online lenders have been slow to materialize, at least in large numbers. In some cases, the main obstacle may be the regulatory obligations imposed on banks when entering into agreements with third parties.

“Yes, partnerships are happening, but probably not at the rate some expected,” said Sam Graziano, CEO of the Foundation.

John Wirth, vice president of fintech strategy at TransUnion, compared the rise of online lenders between 2012 and 2015 to the emergence of dot-coms in the 1990s. He noted that Amazon and eBay eventually emerged. as industry leaders, while a large number of other e-commerce companies have closed their doors.

But by the mid-2000s, traditional retailers that didn’t have websites were no longer taken seriously. “Over time, more traditional lenders will adopt fintech capabilities,” Wirth said in a pre-conference interview.

Or as Karen Mills, former head of the US Small Business Administration, put it, “Don’t count the dinosaurs yet.