Fintech grows up

Fintech grows up

Both financial services providers and media, tech and telecom businesses finding more potential in digital finance, PwC survey finds

Emerging technologies have given companies a low-cost way of creating convenient, personalised, data-intuitive products and services.
Emerging technologies have given companies a low-cost way of creating convenient, personalised, data-intuitive products and services.

Financial services providers and technology, media and telecom (TMT) businesses are increasingly using financial technology (fintech) to sharpen operational efficiency, lower costs, improve the customer experience and heighten the appeal of their products and services. They're also carving out new commercial possibilities.

Digital-only banks are offering redesigned client propositions and cost profiles. Investment managers are deploying fully customised robo-advice. Insurers are using sensors to monitor people's health and drive illness prevention. According to a recent PwC survey, consumers are ready for the digital shake-up. The question is no longer whether fintech will transform financial services, but which firms will apply it best and emerge as leaders.

The 2019 Global Fintech Survey by PwC sought to get a better picture of the current state of play by polling over 500 financial services and TMT executives worldwide about the factors that will determine the winners and losers in the race to develop and profit from fintech-driven business models. Among the key findings:

Fintech-centred strategy is paramount: The survey found 47% of TMT and 48% of financial services organisations have embedded fintech fully into their strategic operating model. Also, 44% of TMT and 37% of financial services organisations have incorporated emerging technologies into the products and services they sell.

TMT businesses set the pace: Financial services executives surveyed think using fintech to improve the ease and speed of their service will be key to retaining customers. But people expect ease and speed, so firms that focus their fintech efforts on these attributes might only meet customers' expectations and not differentiate themselves, especially when competing with digitally intuitive TMT businesses.

The two sectors should also look to each other and retrain to fill skills gaps. The survey showed 80% of TMT and 75% of financial services organisations are creating jobs related to fintech. Yet 42% of those in each sector are struggling to fill these roles. While 73% of financial services organisations are hiring from the technology sector, only 52% of TMT firms are looking to recruit from financial services.

Finding ways to attract people from TMT to financial services, and vice versa, will be important to future success because each sector needs the other's expertise. Upskilling will also be important.

Cross-sector fusion: Among organisations that are planning to pursue an acquisition, strategic alliance or joint venture to drive growth via fintech, 78% of TMT and 76% of financial services firms are targeting businesses within their own sectors. Less than half (44% of TMT and 47% of financial services firms) are targeting a company specialising in fintech.

At a time when financial services firms are striving to sharpen their technology capabilities and TMT needs product and regulatory expertise to compete in the financial services market, firms will miss opportunities if they don't pursue more cross-sector crossover.

"In China, convergence is gathering pace. At the top of the market, we've even seen regulators seeking to match up the big four TMT firms with the big four banks and get them to work together. The TMT firm enables the technology, and the financial services firm delivers the end product," said Wilson Chow, TMT global leader with PwC.

Boonlert Kamolchanokkul, partner, financial services, clients and markets leader, PwC Thailand


Emerging technologies have given companies a low-cost way of creating convenient, personalised, data-intuitive products and services. Fintech has also lowered the barriers to entry for firms -- from established financial services groups to startups or TMT entrants -- and has therefore created a complex web of cooperative competition and collision.

Winners and losers: Companies that have embraced fintech are reshaping the marketplace, and those that haven't are being left behind. Three-quarters of the financial services and TMT executives surveyed said they're stepping up their fintech investment in the next two years. More than 90% are very or somewhat confident that fintech will deliver revenue growth over the next two years. But focus, maturity and speed to market vary.

"As Thailand becomes more of a cashless society, we've increasingly seen business operators embedding fintech, particularly in the area of digital banking," said Boonlert Kamolchanokkul, a partner and financial services, clients and markets leader with PwC Thailand.

"The financial services sector has seen a wave of new entrants, such as e-commerce, technology companies and other non-bank players alike.

"We expect to soon see even greater collaboration among financial services and TMT companies. This is largely because both industries need each other's expertise and know-how. Thai banks need to enhance their technology capabilities to innovate, whereas tech firms need product and regulatory expertise to better compete in the market.

"Several Thai banks have actively contributed to the development of fintech by launching their own initiatives, as well as funding accelerators. They have also partnered with tech firms to respond to customer demand better and faster.

"Besides fintech development, financial services and technology companies need to consider putting in place data security measures to build trust from clients."

To download the full report, visit

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