The nature of competition in the financial market has changed. Competing with traditional banks is a set of financial integrators, a new breed more capable of responding to changes in the market
September 12, 2018 | Saibal Dasgupta
- New players are entering the financial services sector
- The task of the regulators across Asia involves categorising, licensing and managing the new players. However, they are still struggling to determine what kind of slot would fit the new players best
- Banks and finance companies can hardly plan for the long term because technology has a way of making a part of itself absolute and replacing it with a new one
New players are entering the financial services sector, whether fintech companies, e-commerce platforms, blockchain firms or other financial innovators, they can be in many places and markets at the same time.
They take money from and lend to consumers without necessarily having a conventional banking licence. In the recent few years, they have begun to do a lot more than what banks have accomplished in the last 100 years.
Emmanuel Daniel, chairman of the Asian Banker said at a CEO dialogue during the Future of Finance Summit 2018 that web-based finance companies have learnt a simple secret that eluded banks for more than 100 years. Their strength lies in their ability to complement each other and respond to market changes in real time instead of the traditional banking practice of head on rivalry and expensive branch expansion.
The so-called banker had become a bureaucrat repeating himself without governments and regulators noticing. Many banks have begun to change their ways using the web to deliver services but they are still a lot less flexible than the upstarts.
No one is ringing the death knell of the traditional banking system. Many expect a big shakeout scattering weak and rigid banking companies by the way side as new players rush in as the Mongolian hordes once did in the theatre of war.
“We have a range of players who now need to relate to each other. Baidu and JD say they are partners for banks,” he said. “Are...
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