KPMG: Fintech is the biggest disruptor for financial institutions

FINTECH
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According to the global KPMG Fintech report "Forging the Future", technologies like artificial intelligence, block-chain and the internet of things are redefining the very nature of financial services.

As emerging technologies disrupt traditional financial services value chains, many institutions such as banks, insurance companies and investment funds are lagging in implementing effective strategies, according to “Forging the Future: how financial institutions are embracing Fintech to evolve and grow” – a new report from KPMG that surveys more than 160 financial institutions in 36 countries.

According to the report, technologies like artificial intelligence, block-chain and the internet of things are redefining the very nature of financial services. 57% of respondents believe “emerging financial technologies” are the greatest source of disruption today. Besides that, only 46% of respondents said their institution has a clear Fintech strategy in place.
“We are seeing many financial institutions continue to struggle to build and execute a comprehensive strategy around Fintech”, explains Mr. Murray Raisbeck, Global Co-Leader of Fintech, KPMG International. “In many cases, Fintech innovation is left to individual functional areas, without any kind of overarching strategy across the organization”.

Partnering, particularly with start-ups, is driving Fintech activity, according to the report. Overall, 61% of respondents said their institutions have taken a partnering approach to Fintech in the past, while 81% plan to partner in the near future. Interestingly, a similarly high 78% said their institutions are, or will be, partnering with other large non-financial institutions.

Mr. Ian Pollari, Global Co-Leader of Fintech, KPMG International said that “the most important success factor is having a Fintech strategy that aligns closely to the organization’s objectives, has senior sponsorship, recognizes the need to execute on a number of fronts simultaneously, and above all, has a focus on realizing demonstrable value, including customer, cost and regulatory outcomes”.

Mr. Pangratios Vanezis, Board Member and Fintech Leader of KPMG in Cyprus said that “even though there is not yet a single path to follow when it comes to Fintech, those companies aspiring a digital future would create and maintain a clear, long-term Fintech strategy based on solid partnerships. Hence, they will be in position to shape a more stable future for their business by providing demonstrable value to their customers, while complying at the same time with a particularly demanding regulatory framework”.

To access the full report click here.