A new report by PricewaterhouseCoopers (PwC) has found that many financial services companies consider working with fintech companies in the following
A new report by PricewaterhouseCoopers (PwC) has found that many financial services companies consider working with fintech companies in the following three to five years in an effort to prevent revenue loss.
As the report stated (available at: https://www.pwc.com/jg/en/publications/pwc-global-fintech-report-17.3.17-final.pdf), more than 80% of financial services companies think that their business is at risk. Concerned about losing revenues to innovators, 82% of these companies expect to increase FinTech partnerships.
“Financial Institutions are putting disruption at the heart of their strategy with 56% of respondents agreeing with this statement, and only small regional differences (from 54% for European respondents to 61% in North America). By becoming self-disruptors, Financial Institutions seek to appropriately respond to innovations and thereby empower their customers on a daily basis.”, as the report stated.
While banks want to collaborate, some challenges may arise. According to the survey, there are major differences in management and culture that may stand in the way of a possible partnership. Banks, for example, are restricted to a system of checks and balances. This may be a major hurdle to the innovation process. Fintech companies, on the other hand, are more likely to adapt due to the lack of bureaucracy.
“Innovation is happening outside of the organization, with emergent technologies being leveraged by startups, and if financial institutions want to speed up their innovation they need to significantly increase their collaboration with fintech companies.”, said Manoj Kashyap, Global FinTech Leader and Partner at PwC US.
The blockchain technology has been explored by the financial industry. However, its potential spreads beyond it into other sectors like energy, telecoms and pharmacy.
The survey showed that only 19 percent of large financial institutions believe it is the most relevant to invest in the blockchain technology.
Still, the report claimed that 55 percent of respondents are planning to adopt the blockchain technology as part of a production system or process by 2018. A larger percent of 77 are considering adaptation by 2020, when the technology will supposedly be a common feature in the business processes.