FinTech is the instigator of disruption and innovation in the financial services industry. Financial institutions are increasingly at risk of losing business to FinTech innovators, with 67% already feeling the heat.
Consumer banking and payments and funds transfers are the segments which are already witnessing disruption, with a maximum number of consumers already utilising the services of FinTech players in these segments. The rest of the segments—especially lending and wealth management—are poised to follow suit.
A whopping 95% of incumbents in the financial services industry believe that the innovation they seek can be brought about by engaging in FinTech partnerships.
The additional edge that innovative FinTechs, who are free from regulatory and legacy baggage, can provide through partnerships is something that incumbents are aggressively seeking to capture.
To remain competitive in the volatile environment that is gripping financial services, a majority of the respondents in our survey say that disruption is at the heart of their strategy. They are seeking to innovate in myriad ways to stay ahead of the curve of FinTech disruption. Further, 84% of the respondents say that they are driving internal efforts to innovate through FinTech.
Most of the financial services players are expected to adopt the blockchain in some part of their businesses in the next three to five years.
The three key areas that the blockchain will have a notable effect on are payments/funds transfer infrastructure, digital identity management and post-trade settlements.
The focus for FinTech investments is slated to revolve around data analytics, mobile and AI. Data analytics and mobile are more contemporary capabilities that each player in the industry is spending on to remain competitive, However, several players are also focusing on revolutionary technologies like AI, cyber security, robotic process automation, biometrics and identity, blockchain and Internet of things.