A new report from KPMG has found that only 46% of financial institutions around the world have a strategy in place to benefit from the ongoing advances in financial technologies.
This is despite the fact that fintech is identified by 57% of institutions as the greatest source of disruption.
The lack of strategy varies widely between sectors within the financial world. 64% of asset management companies are reported to have fintech strategies in place, followed by 50% of banks and only 43% of insurance businesses.
The new report, Forging the future: Embracing fintech to evolve and grow surveyed 160 financial institutions across 36 countries and conducted in-depth interviews with financial services executives.
Banking, Insurance, Asset Management
The report highlights the areas in which the financial services sector is hoping to make use of the ongoing fintech revolution. Enhancing customer experience is the most important aspect for all financial services sectors: banking (75%), insurance (86%) and asset management (74%).
This is followed by transforming current capabilities, where again all three sectors, banking (48%), insurance (47%) and asset management (57%) agree.
After this, opinion varies widely over areas such as delivering cost efficiencies, protecting core business against threats, expanding new lines of business and developing new artificial intelligence-driven investment strategies.
The majority of financial companies see the greatest innovation and disruption coming from fintech startups (72%), as opposed to existing tech companies (52%) or from within the financial companies themselves (36%).
Scotland’s Fintech Sector
David Ferguson, the founder and CEO of Nucleus Financial Group, told DIGIT: “It is a useful report, which certainly presents a fair reflection of the state of the nation within the financial world. One of the most interesting elements is the focus on customer experience, as opposed to the technology.
“At Nucleus we’ve been aware for some time that the cultural and management changes demanded by shifting corporate focus to customer needs, in many cases outweighs the technology shifts. The report underlines this.”
Mickael Paris who works with Fintech Scotland, the organisation focused on helping Scotland become a recognised global fintech pioneer, told DIGIT: “FinTech Scotland’s mission is to strengthen the fintech eco-system. That’s why we work closely with small, agile start-ups and larger financial services companies.
“We are witnessing a perfect storm with tech companies often missing the business acumen and big businesses struggling to innovate beyond regulatory changes and processes. Both would benefit massively from increased collaboration which is something Fintech Scotland can facilitate.”
The report concludes:
At the rate the industry is evolving, financial products and services – and the technological infrastructure behind them – will look remarkably different in a decade. Financial institutions that take the time to define their fintech strategy and align it to their future vision and business goals, will be best positioned to forge the future of financial services.