Jungkiu Choi, former group head of strategy and business development at Standard Chartered Bank, feels that banks face a growing threat from FinTech start-ups.
July 23, 2015 | Jungkiu ChoiTechnology, legacy and disruption: The combination of these three words is making many senior banking executives worried. On the face of it technology should get this group excited. After all, it has become a key enabler in improving customer offerings.
However, it is its combination with the other two words that is creating issues. Banks have often been criticized for not keeping pace with advancements in technology. Many of them still rely on years old technology – often referred to as legacy systems – to carry out major operations. That has hindered their ability to fully exploit the potential of new developments on the tech front.
That has opened them to disruption - the current buzzword in technology. Simply put, disruption refers to the way new age technology is challenging, and more importantly changing, the business models across sectors. Uber in taxi industry, Airbnb in travel and Spotify in music are some of the prime examples of this.
Growing threat
Banks are now facing a similar threat from Financial Technology (FinTech) start-ups. And they are being challenged on almost all fronts of their business by an ever-increasing pool. According to some estimates, the US market alone has around 1,000 FinTechs operating currently.
The investment level in the sector has also surged in recent years. FinTech investment in the US has risen from just $1.6 billion in 2010 to nearly $10 billion in 2014, according to a latest report by New York FinTech Innovation Lab. The trend is picking up in Europe and Asia as well. That is evident from the fact that global investment in the sector tripled from $4 billion in 2013 to $12 billion last year.
While ‘payments’ continues to be one of the biggest areas of interest for FinTech firms – accounting for more than half of the investment in the US – they are making inroads into other service offerings as well.
Lending –...
Categories:
Customer Centricity, Data & Analytics, Innovation, Risk & Performance, Technology & OperationsKeywords:FinTech, Kickstarter, Avant, Big Data
Jungkiu Choi, former group head of strategy and business development at Standard Chartered Bank, feels that banks face a growing threat from FinTech start-ups.
July 23, 2015 | Jungkiu ChoiTechnology, legacy and disruption: The combination of these three words is making many senior banking executives worried. On the face of it technology should get this group excited. After all, it has become a key enabler in improving customer offerings.
However, it is its combination with the other two words that is creating issues. Banks have often been criticized for not keeping pace with advancements in technology. Many of them still rely on years old technology – often referred to as legacy systems – to carry out major operations. That has hindered their ability to fully exploit the potential of new developments on the tech front.
That has opened them to disruption - the current buzzword in technology. Simply put, disruption refers to the way new age technology is challenging, and more importantly changing, the business models across sectors. Uber in taxi industry, Airbnb in travel and Spotify in music are some of the prime examples of this.
Growing threat
Banks are now facing a similar threat from Financial Technology (FinTech) start-ups. And they are being challenged on almost all fronts of their business by an ever-increasing pool. According to some estimates, the US market alone has around 1,000 FinTechs operating currently.
The investment level in the sector has also surged in recent years. FinTech investment in the US has risen from just $1.6 billion in 2010 to nearly $10 billion in 2014, according to a latest report by New York FinTech Innovation Lab. The trend is picking up in Europe and Asia as well. That is evident from the fact that global investment in the sector tripled from $4 billion in 2013 to $12 billion last year.
While ‘payments’ continues to be one of the biggest areas of interest for FinTech firms – accounting for more than half of the investment in the US – they are making inroads into other service offerings as well.
Lending –...
Categories:
Customer Centricity, Data & Analytics, Innovation, Risk & Performance, Technology & OperationsKeywords:FinTech, Kickstarter, Avant, Big Data
