EY Fintech Are Banks Responding Appropriately
EY Fintech Are Banks Responding Appropriately
Fintech:
Are banks responding appropriately?
The rise of fintech
After decades of relatively low R&D spend, the early impact of
fintech galvanized the banking sector into action. Having sat behind
regulatory walls building large value chains, banks found their
highly visible, commoditized products ripe for disruption. Bitcoin
showed the potential for consumers to transact without a fee or a
regulator. Peer-to-peer lending demonstrated a different type of
disintermediation and consumer appetite for it.
Right now, in the UK, accounting software giant, Sage, is partnering
with two SME funding specialists to offer capital directly to its vast
SME client base, bypassing the banks. Closer to home in China,
WeChats vast user base provides a ready-made market for Tencent
Holdings new bank joint venture, the purely online WeBank. If
WeChat users can be converted into banking customers, mobile
transactions and payments solutions are clear areas of opportunity.
WeBank will also be able to take advantage of Tencents extensive
online experience and access to large amounts of customer
behavior information to offer differentiated financial products.
But this is just the start. Globally, investment in these ventures
tripled to US$12.21b in 2014 and the curve is continuing upward
led by growing market confidence in the ability of digital startups to
disrupt the banking market.
At the same time, Asia become the second most funded region for
fintech, with investors equally excited by access to the worlds
largest unbanked population and a private wealth market about to
overtake that of North America.
Description
Time
commitment
Funding
requirements
ROI potential
Regulatory
support & Govt
incentives
Summary
External factors
Internal factors
Conclusion
Success in the digital era depends on a banks ability to respond logically to the threats and opportunities of
fintech innovation. Executives must ask themselves why, what and how they are innovating and have great
confidence that each answer is grounded in a robust growth strategy and protected by a digital risk platform.
Ian Webster is the lead Partner in EYs Financial Services Customer and Digital practice in Asia-Pacific.
Jeremy Pizzala is the lead Partner for EYs Financial Services Cyber Risk practice in Asia-Pacific.
*Originally published by Efma (www.efma.com), meet us at the Retail Banking Asia 2015 (www.efma.com/asia15).
Jeremy Pizzala
Partner
Ph: +852 2846 9085
[email protected]
Ian Webster
Partner
Ph: +65 6309 8352
[email protected]
ey.com/