Creative TECH’ v Complacent FIN’.

Today, the fintech industry is in the early stages of cooperation and collaboration. To accelerate the true fintech arena, real commitment to partnership is a must. But you can’t assume all tech companies want to partner.

Many do, but others have absolutely no interest and want to disrupt the ‘complacent fin’. Disruptive technology is the new norm in their world, lest we forget. Financial institutions internally will need to understand how this works, and how to innovate from within.

Customers are taking control of their financial wellness, and research shows that investment in the customer experience, market expansion, regulatory compliance and disruptive technology are the key themes and trends that the fintech industry is passionate about. Therefore, the tech industry must fundamentally understand how they will both operate and what they are hoping to achieve under the fintech umbrella. Cooperation is about understanding what both industries are really good at. Critically, the tech industry will need to fully understand global governance, regulatory demands and service culture required in financial services.

The fintech industry with its $30bn injection in the last few years is extremely active and agile. They have already managed to target some easy areas, bringing about greater convenience and reduced fees, leading the financial institutions to fast track digital transformation programs, hire new skills set, invest in new technology and carry out radical transformational changes with mergers and acquisitions. Today, there are two types of fintech; a) fintech legacy (these institutions have traditional legacy systems), and of course b) fintech innovators, whom execute better and faster because they leverage new technologies and do not have to carry any legacy systems, culture and staff.

Given that disruptive technology is the new norm, the fintech innovators will raise the bar even further and even more disruptive technology is taking pace right now, namely Blockchain and Ethereum (a blockchain based solution), that will remove the middleman between customers and service providers. Ethereum is a decentralized platform (a global computer) that runs smart contracts in the blockchain world and will revolutionize how people transact, contract, exchange and distribute content. It is a brand new paradigm based on the following principles: true peer-2-peer services, no need for middle-tier 3rd parties, indisputable traceability using shared ledgers, decentralized autonomous organizations and smart contracts. The applications are endless and will develop quickly as connected objects enhances the Internet of Things (IoT).

Where fintech innovators ask how can we transform financial legacy systems and processes using these new technologies, mainstream financial institutions think differently, asking instead, how can we apply technology to better our financial processes?

The main difference is that many large institutions think TechFin rather than FinTech. They begin with their existing operations and explore how to improve those operations with technology. It’s a mindset that works differently in different markets. Asset & Wealth Management & Investment Banks in the Capital Markets world, for example, are far less fearful of ditching existing technologies and reinventing their operations than large institutions with legacy systems. This is not surprising, as Capital Markets compete in a very cutthroat marketplace where technology has been the competitive differentiator for some years.

As we move towards 2020, fintech and the future of fintech will depend on cooperation and collaboration between all stakeholders within the financial industry. 

Yes, we will see the digital migration of financial services from all financial institutions; and we’ll also witness the age of internet finance, driven by the tech industry and led by outsiders and innovators. however it’s the merger of both at pace that will determine the success of fintech through cooperation and collaboration of all stakeholders.

We have all witnessed the timeline of fintech: 1) the introduction of fintech infrastructure, 2) the introduction of start ups and innovators, 3) introduction of the institutions, 4) introduction of global governance and alliances, 5) now, it’s the merger and cooperation and collaboration of all stakeholders.

Today, I believe fintech is driven by new waves of technologies that will revolutionize our world, and no doubt in time we will see the emergence of the next generation of technological advance. The acceleration of the next generation, and the scale of disruption from data, digital technologies, globalization and other forces means organizations have to evolve to survive.

By David Roche – Director, Financial Services Pramerica Systems Ireland LTD 


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