A recent report from pwc Global explores the ways in which fintech is altering the financial services landscape, causing disruption and changing the product offering in numerous ways. The report examines disruptive forces that are having a dramatic effect on the competitive environment, structure and role of financial services institutions around the world, as well as the societies and markets in which they operate.

New regulatory frameworks introduced following the financial crisis have finally begun to settle, resulting in business models being adjusted accordingly. More information about the global financial crisis and its primary causes can be found in the PDF attachment to this post.

The most creative force within the financial sector at present is without a doubt the acceleration of new technologies, known as fintech. Razi Salih has worked within the financial sector for many years and has experience of establishing new projects that embrace fintech as the solution to many of the challenges that face the industry.

What Is Fintech?

The term ‘fintech’ is a portmanteau of the words ‘financial’ and ‘technology’, and as such can be widely used to describe any form of technology used within the financial services industry, or in any other industry in relation to finances and the delivery of financial products to consumers.

The world of finance is changing for the end user in countless ways thanks to the rapid acceleration of technology within the industry. Automation and online services, for example, now make it possible to access almost any financial service without the requirement to physically visit a financial institution such as a bank or insurance provider.

Fintech also makes it possible for businesses to provide more tailored services to individual clients, such as telematics-based driving insurance. The short video attachment explains how telematics can help make car insurance cheaper.

Fintech also makes it easier for individuals to make investments of various different types, and for businesses to access a wider variety of investment options than ever before.

Fintech Benefits for the Consumer

There are many potential benefits for consumers when companies adopt fintech to help streamline their financial services offering. These include more convenience and a faster service, as many products can be bought and sold online, and a variety of processes can be automated for greater efficiency.

Customers also have access to more choice than ever before, as the internet ensures that location is no barrier to accessing products and services. Companies that utilise fintech and offer a greater proportion of their services online may also be able to make savings on running costs such as infrastructure, with many of the companies passing these savings directly on to the customer in the form of cheaper deals.

Fintech also makes it easier than ever before for companies to collect and store customer data, which facilitates a more personalised service.

Technology-Driven Influencers

The pwc Global 2020 report identified ten key competitive influencers in the financial services industry that were being driven by technology. These included the widespread implementation of blockchain, allowing for decentralised systems that are rapidly becoming an integral part of the operational and technology infrastructure of financial services institutions.

The sharing economy, in which technology can be used to match providers of capital with users, is predicted to draw customers away from many traditional banking services. The report also suggests that the most important predictor of profitability and revenue growth will be customer intelligence, as companies are able to gather and use far more data than ever before.

In the infographic attachment, you can see some of the global statistics for fintech use and investment in recent years.