Active Wealth Management Firms Target Next-Gen Investors Using Old Tech
#Wealth #management #firms around the world are focused on the next generation who will inherit wealth, but their #tech is more Boomer than Gen X.
Financial Technology
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Tech Firms Are Building Bridges Across The Moats That Protected Banks
Payments amount to a $ 1.9 trillion business around the world, a sum too rich to leave just to #banks, according to McKinsey’s Global Payments Report.
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In The Face Of Growing Fraud Threats, Finance Firms Should Look At Managed Security
#Security #threats continue to expand in financial services and #banks, insurance companies and securities #firms #should #look at #managed security for better protection, says Accenture.
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Smaller Financial Firms Struggle To Match Big Bank Digital/Mobile Innovation
#Smaller #financial institutions face a significant threat from the biggest #banks which have huge tech budgets to keep improving digital and mobile applications.
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Financial Firms Need Tech To Meet Mounting Regulatory Requirements
The massive #requirements of regulators will require that #financial institutions develop technical solutions.
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Financial Firms Need Tech To Meet Mounting Regulatory Requirements
The massive #requirements of regulators will require that #financial institutions develop technical solutions.
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World FinTech Report 2017: Half of Banking Customers Globally Now Using FinTech Firms
#Half of #banking #customers across the globe are #using the products or services of at least one #FinTech firm1, according to the first #World FinTech #Report (WFTR) from Capgemini and LinkedIn, in collaboration with Efma.
The inaugural report quantifies and tracks customer response to the rise of FinTechs, includes the views of financial services industry executives at both FinTech #firms and traditional financial institutions2, and summarizes how innovation is key in the emerging industry landscape.
In particular, the WFTR found that FinTechs are gaining momentum and mindshare amongst younger, tech-savvy, and affluent customers. Emerging markets led the adoption where over 75% of customers in China and India report using services provided by FinTech firms, followed by the UAE and Hong Kong.
FinTechs have made the greatest inroads in investment management, where 17.4% of customers rely on them solely and another 27.4% use them in addition to their traditional providers. With so many FinTechs specializing in niche services, the WFTR also found that many FinTech customers (46.2%) are using services from more than three FinTech providers.
FinTechs continue to gain momentum, but overall customer experience and trust remain low
While FinTech providers continue to have a disruptive market presence, overall customer trust levels in these providers remain low. Only 23.6% of customers say they trust their FinTech provider compared to 36.6% for traditional firms. Customers noted traditional financial institutions still hold some advantage over FinTech providers when it comes to fraud protection, quality of service, and transparency.
“Rising customer expectations for more personalized and advanced digital experiences, advancements in #technology, greater access to venture capital, and lower barriers to entry have created fertile ground for growing FinTechs,” said Penry Price, Vice President, Marketing Solutions, LinkedIn. “FinTechs are largely gaining momentum by meeting needs traditional players have yet to address, but many FinTechs lack the transparency required to earn the trust of their consumer audiences to capitalize on these opportunities.”
The drive for collaborating with FinTechs is seen as key to delivering innovation
Traditional financial institutions continue to face challenges, with less than half (44%) of executives confident in their FinTech strategy. This is not surprising given only about one-third (34.7%) affirmed they have a well-structured or proactive innovation strategy in place that is embedded culturally. The risk-averse nature of traditional firms also makes it difficult for them to create cultures that prioritize innovation, and 40.3% of executives said that theirs is not conducive to innovation.
“Financial services senior executives are seeing FinTechs in a whole new light as they see greater opportunities to collaborate, but are also making significant headways in building more agile, in-house FinTech capabilities.” said Thierry Delaporte, Head of Capgemini’s Global Financial Services Business Unit and Member of the Group Executive Board. “But with the exception of a handful of industry leaders, most firms are struggling to achieve positive results from their innovation initiatives with only 10 percent of executives stating they have been very effective at achieving desired innovation results.”
The WFTR found that traditional firms are increasingly pursuing a wide range of strategies in response to FinTechs. A majority of financial institutions (60%) now view FinTechs as potential partners, but nearly the same percentage (59.2%) are also actively developing their own in-house capabilities. Beyond partnership and in-house development, executives are exploring a full range of models, whether it be Investment in FinTech (38%), partnering with educational institutions (34.3%) or setting up accelerators (29.6%), while a much smaller percentage (18.6%) are acquiring FinTechs.
Traditional firms actively investing in emerging technologies to improve both operations and customer experience
Traditional firms are in large, part responding to this shift by giving highest priority to investment in technologies which facilitate more streamlined and effective operations, thereby providing better day-to-day customer experiences.
Nearly 90% of executives report they are most focused on implementing big data and analytics, followed by the Internet of Things (IoT) (55.8%), #blockchain (54.7%), robotic process automation (52.3%), and open API technologies (50%). Blockchain technology, which forms the backbone of the popular virtual currency #bitcoin, is increasingly penetrating the financial services industry. It has numerous applications including enhanced transfers of digital assets, identity management, and better management of reward and loyalty solutions.
“Both FinTech and traditional firms still have work to do on delivering a better customer experience,” said Vincent Bastid, Secretary General, Efma. “The arrival of FinTechs has accelerated the improvement of overall customer experience in the industry but it is still not at the level that customers perceive that it should be. It is only a matter of time before BigTech3 companies and players in e-commerce and telecommunications join in to stake their claim to benefit from this industry disruption.”
To help traditional firms overcome their innate resistance to innovation and address current and potential future disruption, the WFTR has defined a four-step framework which will be essential in the face of a growing number of prospective threats to the financial services business.
According to the report, traditional FS firms can unlock innovation by: discovering new technologies, devising ideas and insights into business models, deploying aligned executives to support innovation, and sustaining innovation by improving efficiency and implementing best practices. As the “platformification”4 of the industry continues to gain momentum, it will be more and more imperative that financial institutions take aggressive action to innovate to ensure they are prepared.
The post World FinTech Report 2017: Half of Banking Customers Globally Now Using FinTech Firms appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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Federal Council Wants To Reduce Barriers To Market Entry For Fintech Firms
A dynamic #fintech system can contribute significantly to the quality of Switzerland’s financial centre and boost its competitiveness. Against this backdrop, the Federal Council called for an easing of the regulatory framework for providers of innovative financial technologies during its meeting on 2 November 2016. This easing should #reduce #barriers to #market #entry for providers in the fintech area and increase legal certainty for the sector overall. The Federal Department of Finance (FDF) was instructed to prepare a corresponding consultation draft.
Digitisation in the financial business is advancing rapidly and has given rise to different business models in the fintech area. Accordingly, the requirements of these players for low barriers to market entry are different. The #Federal #Council is striving for a future-oriented solution which is as comprehensive as possible and is thus recommending an approach with three supplementary elements:
The first element sets a deadline of 60 days for the holding of money in settlement accounts, which is particularly relevant for providers of crowdfunding services. Fundraising for a crowdfunding project can thereby be facilitated. This amendment would not be restricted to fintech companies, and would instead be generally applicable.The second element is a sandbox (an innovation area). In this area, a provider can accept public funds up to a total value of CHF 1 million. These activities do not have to be authorised and are not monitored by FINMA. This fact must be disclosed, however. The current money laundering provisions are applicable in the case of a sandbox.
The third element is a new fintech licence granted by FINMA. For institutions which are restricted to the deposit-taking business (acceptance of public funds) and thus do not operate in the lending business with maturity transformation, less stringent regulatory requirements should apply than those for classical #banks. Involvement in the depositor protection system is thus not envisaged. The public funds accepted by providers with a fintech licence may not exceed the overall value of CHF 100 million. So long as protection of the individual client is guaranteed by special conditions, FINMA can authorise a higher threshold. For institutions with the new licence, the minimum capital should amount to 5% of the accepted public funds, but no less than CHF 300,000.
The creation of a fintech licence is also pioneering by international standards. The new regulation sets out in concrete terms one of the strategic thrusts of the financial market policy recently adopted by the Federal Council. The Federal Council has instructed the FDF to draw up a consultation draft with the required legislative amendments by the start of 2017. Moreover, the FDF should conduct additional clarifications in cooperation with the interested authorities on reducing further barriers to market entry for fintech #firms, also those outside financial market law (e.g. legal treatment of virtual currencies and assets).
The post Federal Council Wants To Reduce Barriers To Market Entry For Fintech Firms appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.
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European Insurance Firms Launch New Blockchain Consortium
Five major #European #insurance and reinsurance companies have partnered on a new #blockchain initiative.
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China’s Financial Firms Urge Regulators to Help Mature Blockchain
#China’s major #financial institutions believe governance should not be replaced in any larger transitions to #blockchain.
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