CFA Society Singapore
SINGAPORE (April 6): In line with the global trend, 88% of respondents from Singapore’s financial institutions this year see financial technology (fintech) as a real threat to their revenue as compared to just 73% in 2016, according to a new report by PricewaterhouseCoopers (PwC).
Redrawing the lines: FinTech’s growing influence on Financial Services draws on PwC’s 2017 Global FinTech Survey, which is based on the responses of 1,308 participants globally.
Survey participants principally comprised CEOs, heads of departments, heads of innovation, and heads of IT/ digital/technology from 71 countries spread across six regions including Singapore, where there were 40 respondents from a variety of industries including banking, insurance and fintech.
Despite an increasing fear of fintech posing a risk to their revenues, 82% of global banks, insurers and investment managers intend to increase their partnerships with fintech companies over the next 3-5 years – whilst almost 9 out of 10 Singapore respondents indicated the same, notes PwC in a Thursday press release.
The most relevant technologies indicated by respondents in Singapore are namely data analytics (82% vs 72% globally), which is followed by artificial intelligence (44% vs 34% globally).
As data and analytics are fundamental to the adoption and innovation of more advanced technologies, in PwC’s view, it is “unsurprising” that this field emerged as the top technology that industry players intend to focus their investments on in the next 12 months, both in Singapore and worldwide.
Of the opportunities related to the rise of fintech, expanding products and services emerged as the number one opportunity in Singapore (60%) as well as globally at 62%. Notably, a larger proportion of industry players in Singapore (45%) recognise leveraging fintech to differentiate their business as an opportunity compared to their global peers (29%).
PwC believes the data is indicative of a mutual understanding between Singapore’s financial institutions and fintech businesses, where it is recognised that partnerships between the two can facilitate more effective innovation than either alone.
“On one hand, fintech companies can benefit from financial institutions’ existing processes and infrastructure which would otherwise be too costly for them to undertake on their own. On the other hand, incumbents can leverage the innovation and new technologies from fintech players to overcome legacy issues, sharpen operational efficiency and respond to customer demands for more innovative services,” explains the multinational professional services network.
Antony Eldridge, fintech and financial services leader, PwC Singapore, notes the city state regulator’s “progressive approach” which he believes helps to nurture fintech by providing a “conducive ecosystem”, such as through its introduction of regulatory sandboxes that allow experimentation on new technologies while minimising risks to consumers.
“The [survey] results indicate that there is real room for growth in Singapore’s FinTech ecosystem, which comes at a good time as we are also noticing a growing acceptance of non-traditional FinTech solutions by consumers. That, in turn, is driving FinTech solutions to grow beyond low value, high volume to address more advanced and complex needs of client groups such as in asset and wealth management,” says Eldridge.