Why Tsunami?
88% of banking institutions fear of revenue losses as the use of banking services significantly narrowing owing to increased financial innovations in payments, money transfers and loans (Global Fintech Report 2017, PwC Survey)
Share of risk is estimated at 24% of total revenues –
a threat to performance and asset quality of financial institutions
Job losses also expected
Central bank seigniorage
Is it slowing down any soon? Definitely No.
30% of consumers plan to increase their usage of financial services provided by Fintech companies
Huge investment ongoing
82% of financial institutions seeking to collaborate with Fintech companies. The partnership is up from 32% in 2016 to 45% on average in 2017
At the global level the distribution of banks-fintech partnerships is uneven suggesting further expansions
Germany, 70%; South Korea, 14%; US, 53%; UK, 43%
50% aiming to acquire fintech start-ups
Investment rose at a compound annual growth rate of 41% over the last 4 years
Received cumulative investment worth US$40.0 in a PwC’s DeNovo research
Why Tsunami?
New entrants
Technological companies: Google, Apple, Samsung
e-Retailers: Amazon, Alibaba
Social media: Facebook, SnapChat
Fintech companies are raising the stakes going into new areas
Blockchain technology being used for digital identities to address cybersecurity and build trust i.e. going beyond crptocurrency
Advanced Artificial Intelligence
Biometric authentication
Deloitte outlook (Tech Trends 2017: The Kinetic enterprise) suggest that financial institutions are apparently moving towards:
Dark analytics so that behind the scene communications can be analysed for greater transparency
Machine intelligence: towards machine learning and robotics process automation
Fostering Ponzi Schemes such as MMM
Fintech are platforms for shadow banking
