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Banking and payments “under threat” from fintech - PwC

The Global FinTech Survey 2016, published earlier this week by PwC, looks at how fintech is shaping financial markets and many in the financial services industry – 83 per cent according to the survey – think that some part of their business is at risk of being lost to standalone fintech companies. Blurred lines: how fintech is shaping financial services found that 20 per cent of the financial services business will be at risk from fintech by 2020, based on research with 544 respondents, principally CEOs, heads of innovation, chief information officers (CIOs) and top-tier managers involved in digital and technological transformation.

Fintechs "could capture one-third of financial services business"

The report points out that fintech companies are succeeding in areas in which traditional financial institutions (FIs) have struggled and there is the real possibility of disintermediation for FIs as this trend continues and fintech companies are able to offer lower prices. Fintech companies believe they could capture 33 per cent of financial service business.

Payments and banking will see biggest fintech changes

The report's multi-media presentation – with six videos giving further insights into the development and opportunities within fintech and interactive charts giving great interactive choice in exploring the data – shows change ahead for the payments and banking sectors. Some of the key findings include:

1. Top fintech trends in payments

The top three fintech trends in the payments sector in the next five years are:

  • advanced tools and technology to protect customers from identity theft and fraud (63 per cent)
  • increased push for faster payments (52 per cent)
  • rise of digital wallet adoption (51 per cent)

2. Fintech disruption in consumer banking and payments

The financial sector likely to be the most disrupted by fintech over the next five years is consumer banking (according to 73 per cent of respondents), closely following by funds transfer and payments (55 per cent). This clearly shows that payments are “where it's at” in terms of fintech disruption. The result – the opinion of senior executives involved in digital and financial technologies – suggests that corporate payments will not be far behind consumer payments in this digital revolution.

3. One man's 'fintech threat' is another man's opportunity

The respondents of the survey said the biggest threat represented by fintech would be pressure on margins within their industries and more than half of them said that losing market shared would be one of the possible risks. More than 50 per cent also said that data security and increased customer 'churn' could also happen as a result of fintech innovation.

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This item appears in the following sections:
Payments - Receipts
Accounts Receivable Management
Payments - Disbursements
Accounts Payable Management
International Payments
Collecting Payments on the Internet
Collecting Payments via Mobile