It is apparent that while fintechs have changed the basis of competition within the wider financial services environment, they are not changing the competitive landscape, according to a report from the World Economic Forum and Deloitte.
Co-author of the World Economic Forum/Deloitte ‘Beyond Fintech: A pragmatic assessment of disruptive potential in financial services’ report, Deloitte Canada Americas FSI regional leader, Rob Galanski, said the findings of the three-year research period had looked under the bonnet and beyond the first wave of fintech evolution.
“Fintechs have changed the pace of innovation and reshaped customer expectations across the financial services ecosystem. They have laid the foundation for future disruption in the industry and been successful in changing the basis of competition,” he said.
“This together with the increasing pace of technology, means that incumbents have the potential to improve rapidly — but also face rapid disruption ahead.”
In Australia, Deloitte Australia financial services innovation partner leader, Joel Lipman said fintech had not been the wave of change initially touted and had still failed to break through the trust barrier established by traditional financial services providers.
“Fintechs haven’t provided the impetus that we first thought they would to change the competitive landscape, because they haven’t been able to convince customers to move away from incumbents,” he said.
“Incumbents’ market scale and broad customer bases ensured they maintained their competitive advantage.”
Lipman said an increased focus on the drivers of future changed within the industry, such as the creation of accessible data could boost the position of fintech across Australia and drive it to a competitive position.
“The imminent open data regime, in combination with a broader cloud play and platforms that offer the ability to engage with different financial institutions from a single channel, will change that,” he said.
“These forces, along with the shifts from our domestic and global regulators to make financial services a more level playing field, will cause overseas banks to eye our Australian market even more keenly.”
