4 Fintech Graphs You Need to Know Today
Despite the buzz around Fintech, its adoption has been rather modest – 33% worldwide in 2017, according to EY. And that too only represents the adoption among mainstream financial institutions.
Fintech is undoubtedly the future of financial services. For faster adoption, it is essential that businesses understand its full potential, realize its urgency, and are able to make the technology shift successfully.
Here are 4 Fintech graphs that businesses dealing with financial services must know.
1. Fear of Disruption
Fintech startups, with their knack to use technology to explore new ways of improving service quality and customer experience, have imposed a serious threat to established financial institutions from the very beginning. And the threat is only growing with time, as depicted in the chart above.
By defining new standards within the financial services, they have raised customers’ expectations. As a result, today’s customers want simpler, more convenient, more transparent, and personalized services across different channels.
This has left incumbents with a few options – partner with a Fintech startup, acquire one, or invest in technology to transform their core business model, IT infrastructure, operations, and service delivery models. ‘Disrupt or get disrupted’ – has become the industry norm.
Suggested Read: Top 3 Digital Transformation Technology Drivers for 2018
2. Markets with Opportunities
One of the key traits of Fintech services is that they not only improve service quality and experience but can also help in tapping the untapped market segment. For example, mobile money services have proven an effective gateway for financial inclusion of unbanked in developing countries like India and Brazil. According to PwC, this can evolve into a $3 billion payment volume opportunity worldwide.
CB Insight Fintech Report 2017 identifies Latin America and South East Asia as the biggest hubs for such growth opportunities. As the graph above shows, unlike North America and Europe, Asian and South American markets are still maturing; and, unlike Australia and Africa, these markets have more potential for Fintech disruption.
Clearly, businesses dealing in financial services in South America and South-East Asia have huge growth opportunities. And so have startups and overseas financial firms looking to enter these markets.
3. Relevant Technologies
Traditional financial institutions are heavily focusing on technology to close the gap Fintech startups have created for them in the financial service sector. However, incumbents need to be more strategic about technology selection and focus only on technologies most relevant to their business.
As clear from the chart above, data analytics, mobile, and AI are currently the hot focus areas in the finance industry. Collectively, these technologies can help BFSI companies achieve capabilities like – better identification and quantification of risk, delivering value-added services, increased market penetration, better credit offerings, and so on.
Besides these, blockchain is expected to go mainstream this year; therefore, regulatory policies are subject to change. Similarly, recent advancements in AI have unlocked possibilities to further improve services and operations. It is certain that early adopters will be on the higher ground to meet customers’ growing demands and to comply with the new level of transparency that comes with these technologies.
Related Read: How AI Is Driving the Next Phase of Growth in Fintech
4. Strategic Priorities
Digital transformation is more about strategy than technology. So, it is essential for companies to be first clear on their goals with the technology enablement.
The graph above on strategic priorities gives a broad picture of how the entire financial services industry is moving with the technology. This is primarily a reflection of what customers are expecting or will expect from different financial products – be it transactions, asset management, investment, or insurance. Knowhow of such industry trends can certainly help companies narrow down their focus on goals that can bring them maximum ROI on technology investment.
Additionally, for companies already investing in technology, comparing their current priorities against the industry average can help them analyze how far ahead or behind they are in their digital journey.