Fintech seen as the biggest disruptor for financial institutions
As emerging technologies disrupt traditional financial services value chains, many institutions are lagging in implementing effective strategies, according to Forging the future: how financial institutions are embracing fintech to evolve and grow – a new report from KPMG that surveys more than 160 financial institutions in 36 countries.
Fintech strategy challenges
Addressing the organizational response to fintech is proving challenging to many institutions. Only 46 percent of respondents say their institution has a clear fintech strategy in place, with 42 percent indicating a strategy is in development and 10 percent having no fintech strategy at all. Of those with a strategy, only 47 percent believe it is well aligned with the challenges posed by fintech.
Over 70 percent of financial institution respondents ranked ‘enhancing customer service’ as a top objective for their fintech strategy. ‘Transforming existing capabilities’ was second with 48 percent identifying it as a key objective.
Partnering, particularly with start-ups, is driving fintech activity, according to the survey. Overall, 61 percent of respondents say their institutions have taken a partnering approach to fintech in the past, while 81 percent plan to partner going forward.
72 percent of respondents believe fintech start-ups will be the main source of fintech innovation over the next three years, so it is not surprising that 81 percent say their institutions are currently partnering with start-ups or plan to in the next 12 months.
Interestingly, a similarly high percentage – 76 percent – say their institutions are, or will be, partnering with other large non-financial institutions.
Looking at financial technologies over the next three years, survey respondents expressed the greatest interest in big data and analytics and Application Program Interfaces (APIs) - with 67 percent and 55 percent respectively ranking them first or second in interest.
Download the full report here: Forging the future: how financial institutions are embracing fintech to evolve and grow.