Fintech – what does the future look like?

The fintech imperative
Without a doubt, fintech has the potential to be one of the biggest disruptors of our time. These start-ups offer world class customer experiences, deliver services at a lower cost and improve back-office efficiency – all through the use of modern technology. The value chain is undergoing a significant reinvention. For many financial institutions, how and when to embrace the appeal of fintech is a strategic priority.
By surveying over 160 financial institutions from 36 countries and interviewing the key leaders throughout the ecosystem, KPMG is able to provide a better understanding of how these companies will adapt to the modern day digital paradigm.
Building the right foundation
A key learning from the global study was that there is no single optimal approach. Many of the large organisations are attempting to leverage fintech in very different ways – from partnering/buying solutions to direct investment into the new companies. However, consistent across all successful approaches is a defined and focused fintech strategy, which typically includes:
  • a strong understanding of current business operations

  • a keen awareness of the signals of change

  • ability and appetite for change and understanding of the potential barriers

  • aligning business objectives to the fintech strategy

  • innovation activity focused on large scale paradigm shifts as well as incremental improvements.

Integrating fintech
A defined and focused strategy is not enough to ensure fintech is successfully integrated into an organisation. The continuum of approaches is notable across the financial institutes – some are looking to defend their position through the use of fintech while others seek growth. The leading organisations are asking four key questions:
  1. What will we be famous for?

  2. What role(s) do we want to play in our customers’ lives?

  3. Where should we play?

  4. How can we win?

The answers to these questions will likely require significant changes to an organisation’s business model and culture, therefore the required fintech capabilities are strongly linked to the organisation’s aspirations.