Translating innovation into long-term commercial success
Technology plays an increasingly predominant role in financial institutions’ strategies addressing the imperatives of customer experience and operational efficiency, and finally leading to the emergence of new offers, sometimes complementary but sometimes also in direct competition with incumbents.
FinTech companies that compete with banks are often called ‘digital attackers’ and have historically started gaining traction in lending, such as P2P platforms and new international transfer protocols. Gradually other verticals have emerged, such as neo-banks or robo-advisors. Cryptocurrency and digital assets have fundamentally challenged how the financial services industry operates today, while others are helping incumbent financial institutions operate more efficiently, including data & analytics providers.
What is undeniable is consumer interest. In many regions of the world, most consumers have adopted services from FinTech companies, and most of them know at least one FinTech alternative to their bank for money transfers or to make payments in their everyday life. This trend was accelerated by the Covid-19 crisis.
Despite all those positive signs and the incredible speed at which the FinTech industry is developing, with the emergence of many unicorns, many Fintechs will still face challenges in the future, including strategy and commercial viability of their business model, approach to regulatory compliance, funding needs, state of their tech stack and related security issues required governance framework and more.
The most critical factor in addressing those challenges successfully is talent.