Fintech is reshaping the financial services landscape in New Zealand and around the world, blurring the boundaries between traditional financial institutions and other industries, and intensifying competition. The future of fintech belongs to those who become ‘connected enterprises,’ leveraging data from front to back office to drive their decision-making.
KPMG’s latest report delves into the key signals of change in the market. It examines the emerging business models that financial services companies, including banks, are considering. Specifically, the report explores the decision of whether to ‘own’ the customer interface or to act as providers to other companies that offer a wide range of products alongside financial services.
Signals of change
The future of fintech will continue to be defined by customer demand for speed, convenience, and choice. Traditional business models are being challenged. With apps increasingly serving as the entry point for services, the market for financial services has opened to non-traditional competitors. This paradigm shift signals a potential threat to the dominance of banks and other financial services companies, some of whom risk becoming back-office providers to major consumer/technology brands. These conditions have framed the rise of modern fintech.
- Customer: Rising demand for wider, more personalised choices and a connected experience
- Competition: Fintechs may need to embrace “co-opetition”-style strategic partnerships
- Product: Fintechs innovate to stay connected to changing customer demands and disruptive new technologies
- Technology: The rise of decentralised financial ecosystems
- Regulatory: Growing regulatory scrutiny necessitates investment in regulatory and compliance resources