Consumer banking is on the verge of disruption, much of which is led by the disaggregation of simple products and service offerings.
The majority of financial sector executives believe consumer banking is the sector most likely to be disrupted by FinTechs. As much as 76% of banking respondents fear some part of their business is at risk Nevertheless, just over half of the banks consider themselves to be customer-centric, while as much as four in five FinTechs believe they deliver customer-centric service and offerings. This might be one of the reasons why 42% of banks, the most of all financial sectors, engage in joint partnerships with FinTech companies new entrants pick off segments of the banking sector and develop narrowly defined, but highly effective solutions to manage customer expectations. Competition between banks and new entrants may give way to direct cooperation across the FinTech ecosystem. Opportunities exist for partnership and cooperation that would leverage each other’s strengths, whether in product design and development by the start-ups, or distribution and infrastructure capabilities by banks. However, several major impediments inhibiting business relations between banks and FinTechs remain. We see both sides coming to the realisation of a new, mutually beneficial relationship that is possible, but it is still early in execution.
Full survey available here.