Financial technology (fintech) companies target market inefficiencies and have disrupted operating and business models of incumbents by elevating customer experience and expectations. Over last ten years, the entry of fintech companies can be categorised into three broad phases. Initially, the financial industry witnessed an influx of innovative business-toconsumer (B2C) fintech disruptors competing with traditional players. This was followed by increased ecosystem partnerships among fintechs and institutions to meet customer needs. Now the industry is witnessing the emergence of more business-tobusiness (B2B) fintech companies that enable the technology capabilities of businesses.

Pandemic accelerated digitisation

The global pandemic rapidly changed customer behaviour, some that will last post pandemic, and is reshaping how consumers interact with financial services providers. It accelerated the adoption of ecommerce transactions and online financial services. Customers readily shifted towards real-time cashless and contactless payments. There is greater adoption of instant payments, QR based payments, ‘request to pay’ and faster cross-border payments. All these provide new growth opportunities to payment companies.

The pandemic pushed the financial services industry to increase cloud adoption. Companies leverage data and advanced analytics to differentiate services while artificial intelligence (AI) finds new applications in improving and personalising customer experience and enhancing risk management. Moreover, ethical and explainable AI modelling is now catching the attention of the industry.

On the other hand, peer-to-peer lending companies face challenges with reduced investor appetite and renewals as well as a rise in default. The slowdown in the global economy could potentially increase the micro and small and medium enterprises (MSME) financing gap.

Moreover, risk has increased, with...

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Financial technology (fintech) companies target market inefficiencies and have disrupted operating and business models of incumbents by elevating customer experience and expectations. Over last ten years, the entry of fintech companies can be categorised into three broad phases. Initially, the financial industry witnessed an influx of innovative business-toconsumer (B2C) fintech disruptors competing with traditional players. This was followed by increased ecosystem partnerships among fintechs and institutions to meet customer needs. Now the industry is witnessing the emergence of more business-tobusiness (B2B) fintech companies that enable the technology capabilities of businesses.

Pandemic accelerated digitisation

The global pandemic rapidly changed customer behaviour, some that will last post pandemic, and is reshaping how consumers interact with financial services providers. It accelerated the adoption of ecommerce transactions and online financial services. Customers readily shifted towards real-time cashless and contactless payments. There is greater adoption of instant payments, QR based payments, ‘request to pay’ and faster cross-border payments. All these provide new growth opportunities to payment companies.

The pandemic pushed the financial services industry to increase cloud adoption. Companies leverage data and advanced analytics to differentiate services while artificial intelligence (AI) finds new applications in improving and personalising customer experience and enhancing risk management. Moreover, ethical and explainable AI modelling is now catching the attention of the industry.

On the other hand, peer-to-peer lending companies face challenges with reduced investor appetite and renewals as well as a rise in default. The slowdown in the global economy could potentially increase the micro and small and medium enterprises (MSME) financing gap.

Moreover, risk has increased, with...

Categories:

Keywords: