The KEY Fintech question: WHY NOW?

The KEY Fintech question: WHY NOW?

Malikkhan Kotadia

Mentor at The FinLab Pte Ltd

Views 989

The KEY Fintech question: WHY NOW?

13.10.2016 08:30 am

In my talks and panel discussions across the region, a key question invariably asked is: WHY NOW? What's so different or special now that everyone is going ga-ga over Fintech.

Here I will attempt to demystify it:

  • The first thing to remember is that FinTech ISN'T a NEW phenomenon. Infact, it has been around in some form or fashion since the '80s. It just wasn't so sexy or glamorous then!
  • So, what's DIFFERENT? The below mentioned factors factors, which have created a unique 'cocktail'. Showing them again:
  1. Trust deficit since 2008: If you thought it's a thing of the past, look again. From the Wells Fargo issue to the Deutsche Bank challenges, the ghost just won't go away!
  2. Moreover millennials have radically different notions of trust and brand affinity. Their social network determines trust, not a 200 year old institution!
  3. Bad CX: How many of us have cursed our bank or insurer, or atleast had a bad experience? Till now, we didn't have options, but now fintechs give us a plethora of choices.
  4. Three key factors drive CX:
  • Speed: Imagine an incumbent saddled with a 30-40 year old legacy platform vs a challenger building it on completely new railroads. Banks take days for remittances; newer fintech players built on innovative models and railroads can do it in minutes!
  • Convenience: AS-400 and multiple systems vs. an API based platform using blockchain for money transfer and AI for personalization... is it even comparable?
  • Cost: High fixed costs and overheads vs a modular architecture built on PAAS/IAAS/SAAS!

Given these factors, it's no surprise that 4 out of 10 FI innovators are non banks! Expect to see many more in the coming years...

 

5. Exponential mobile growth: This is not only leading to newer business models like P2P payments in millennials, but also driving financial inclusion of the 2 billion un(der) banked.

6. Private funding: Low Fixed cost models combined with $ 30 billion in venture funding means thousands of fintechs can see the light of the day. Most likely, 99% will die!

Yet 1% of approx 12K fintechs means over 50-100 great success stories!

No wonder this threat/opportunity (depending on how you perceive it) is REAL..

 

Latest blogs

Granville Turner Turner Little

The Lockdown Money Revolution

Many Brits have found that lockdown has been beneficial for their money, having cut back on personal spending and managing to put away some extra cash. According to eToro, Brits with unspent discretionary income are set to accumulate £75.5bn in Read more »

Sandra Higgins Sysnet Global Solutions

Are You ‘Prescribing’ the Right Security Solution to Your Merchants?

When it comes to leading a healthy lifestyle, eating the right food, taking regular exercise, and maintaining a positive mindset are key. However, despite these best intentions and practices, you still might not get all the nutrients your body needs Read more »

Robert Flowers DivideBuy

It Doesn’t Have to Be the End – How Retailers Can Grow in Light of COVID-19

It’s no news that the retail industry has been flipped on its head by the COVID-19 pandemic. Due to the lockdown, most in-store operations have been shut down, and nationwide furloughs, reduced pay and steady streams of income at risk have fuelled a Read more »

n/a n/a

4 Ways to Protect Your Small Business Against Cyber Attacks

Just because you are running a small scale business doesn’t mean you are beyond the reach of hackers and attackers. Many small businesses have this thought, which is why they do not invest in their cybersecurity. Unfortunately, every year small Read more »

Kirston Winters MarkitSERV, IHS Markit

IBOR transition update: €STR grabs a foothold?

In the latest development in the IBOR transition, on the weekend of July 25th, we saw the major CCPs perform the much-anticipated Euro discounting and price alignment transition from using EONIA to EuroSTR (a.k.a. €STR) for all Euro OTC interest Read more »

Related Blogs

Leon Muis Yolt

HM Treasury's Relaunch of Independent FinTech Sector Review

We welcome the Treasury’s decision to relaunch an independent review of the UK’s FinTech sector. At the heart of the review should be a desire to evolve the financial services sector and respond to the changes brought on by the COVID-19 pandemic. Read more »

Phil Siarri psiarri.xyz

Fintech: Beyond the Banks vs Startups Paradigm

In the past couple of years, the media has heavily focused on reporting the development of new ventures in the financial technology sphere (''fintech'' as the cool kids like to call it). We have witnessed countless sensational headlines pitting big Read more »

Nóra Bézi Bitrise
Ian Bradbury Fujitsu

Britain remains the most attractive country in Europe for financial services investment

Recently EY has revealed that Britain remains by far the most attractive country in Europe for financial services investment. According to the EY research, the UK recorded more than double the number of projects of any other European country, with Read more »

Will Hurst Monevo

Fintech vs traditional banking

The financial services competitive landscape has evolved in recent years and it’s clear that fintechs have certainly disrupted traditional banks. Fintechs include any financial tech company that serves any of the following areas; lending, blockchain Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel