As fintech disruptors change how everything works, banks and financial institutions are either partnering with them or developing and deploying their own solutions. With the world becoming one enormous marketplace, we have seen a constant change in how businesses take place. This has been further fueled by new technologies and rapidly evolving customer expectations. Even the highly regulated banking and finance sector has in recent times witnessed the constant metamorphosis of its business models to stay ahead in disruptive times. When it comes to the financial services ecosystem, the fintech industry plays a significant role in determining how the sector moves forward.
Financial technology ("FinTech") generally refers to digital innovation in the financial sector. At its inception, the understanding of FinTech was limited to innovative ways of facilitating payments and transactions. Underpinned by revolutionary shifts in Internet and mobile technology in recent years, the realm of FinTech has witnessed explosive growth. Nowadays, it refers to a wide variety of technological interventions within the financial services arena, such as crowdfunding, online customer acquisition, mobile wallets, P2P lending, MPOS, MSME services, personal financial management, private financial planning, Blockchain and crypto currencies. Given the opportunities that FinTech affords, many technology companies have been actively trying to tap into the financial market.
This story was delivered to BI Intelligence "Fintech Briefing" subscribers. To learn more and subscribe, please click here. Australia's fintech industry has been slower to scale than those of the UK and US, partly due to a lack of available talent. One way Australian fintechs are looking to combat this issue is by making a concerted effort to attract fintech specialists from the UK, according to a press release from industry body Fintech Australia seen by BI Intelligence. In order to facilitate this, a number of Australian fintech companies will travel to London this week for the British Australian Fintech Forum, where they will promote the advantages of relocating to Australia, particularly in light of the potential impact of Brexit.
It is time for banks to take the fintech movement seriously as adoption of fintech could double among digitally active consumers in 2016. The level of financial technology (fintech) adoption among digitally active consumers is set to grow significantly in the next year. This will require traditional financial services companies to revisit their product development, distribution, communication and innovation strategies to compete effectively with the new market entrants, according to EY's first Fintech Adoption Index. The survey included 10,131 "digitally active" consumers in Australia, Canada, Hong Kong, Singapore, the UK and the US. It was found that 15.5% of those surveyed had used at least two fintech services – financial services products developed by non-bank, non-insurance or online companies -- in the past six months.
With a bit of flexibility, forward-thinking and co-operation with fintechs, long-established financial services show there's life in the old dogs yet. With so many hot new fintech kids on the block, these days, staying ahead in financial services means a bit of'Keeping Up with the Card-cash-ians'. Yes, the new breed of banking and finance is informal, mobile and totes millennial-friendly. Pop culture references aside, disruption has rankled the financial services industry – which was primed for a makeover following a financial crisis that made people the world over wonder if the old way was still the only way to do things. But to truly know our fintech future, we must look to the past and see how legacy banks and long-established financial institutions are shapeshifting for this disruptive new era.