LONDON, 6 DECEMBER 2017: The latest Fintech Disruptors Report, “Picking Winners – Determining Success in Digital Finance”, released on Wednesday shows that bank fears over the threat to their existence from the fintech wave appear to be receding.
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While the scale of the challenge facing banks may actually have increased – the research shows an uptick in revenues perceived to be at risk from disruption by new entrants from 27% last year to 31% this year - stronger balance sheets and scale are giving banks renewed confidence in their ability to respond to the challenges of digital finance.
The report also gives further evidence of the growing humility across the financial services industry as both banks and the fintech community come to terms with the need to co-exist in the new ecosystem. Banks are aware they need to incorporate the speed and agility of the new tech-centred finance. Notably, the research reveals that 44% of banks now view the creation of new business models as a primary reason to partner with new entrants.
Among fintechs, some of the early naïveté around the scale of the opportunity has been replaced by recognition that they are currently unable to match the scale of established institutions, and strong partnerships with them are now a key route to success.
“Banks are asking themselves deep questions – who are we? and where do we want to be? – and are focusing their digital efforts mainly on the immense job of internal transformation as they prepare themselves for the next phase of the fintech wave” says report author Simon Hardie and Director of MagnaCarta Communications, the publisher of the research.
“It’s a bit like turning a tanker, and the research provides evidence that enthusiasm for some of the earlier fintech hype is waning as banks focus on the task in hand. In comparison, fintechs are the speedboats – racing for scale and trying to catch up with their banking peers.”
The Fintech Disruptors Research on the impact of fintech across Europe, Middle East and Africa is an annual initiative taking in views of more than 20 fintech founders and bank innovation heads and combined with the results of an industry survey distributed to more than 5,000 fintechs and banks across the region.
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