Bankers most fear losing consumer loans to fintechs
BANKERS see personal loans as the area of their business most at risk of being lost to fintech disruptors, a survey has found.
Accountancy firm PwC’s global fintech report 2017 found that 80 per cent of bankers see consumer banking at the epicentre of disruption over the next five years, with 64 per cent seeing personal loans at risk of moving to a fintech company.
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However, 63 per cent of bankers see the rise of fintech as an opportunity to expand their offering, with 54 per cent looking to engage in partnerships, up from 42 per cent last year.
And 40 per cent would like to buy the services of fintech companies, compared to 25 per cent of respondents in last year’s survey.
“Banks are focusing on the improvement of their operations through digital solutions and are looking to increase customer empowerment and/or control of financial matters,” said PwC. “Based on our survey, banks are also exploring new technologies, such as blockchain, with nearly one-third of respondents stating that they are in the early stages of evaluating their strategy and potential partnerships.”
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As well as specifically surveying the views of bankers, the report found that out of 1,308 financial services executives worldwide, 88 per cent fear losing business to innovators, particularly in the payments, fund transfer and personal finance sectors.
Large financial services firms could lose 24 per cent of their revenues over the next five years due to developments in fintech, according to PwC.
To address this growing threat, more partnerships are expected between the two groups. 82 per cent of the financial services executives interviewed said they expect to increase their collaborations with fintech firms in the next three to five years.
“Incumbent organisations need to revisit long-standing assumptions,” said PwC.
“These include rethinking where their competitive strengths rest, how efficient scale can be achieved, what consumers expect of their financial institutions, the nature of the competition, and how these might be changing.”