In a relatively short time, fintechs have become an established part of the financial services environment. The fast pace of innovation within the sector, allied with fintechs’ ability to understand customers’ wants and needs through data analytics, has resonated with consumers and businesses eager for customer-friendly products that speed up transactions and widen choice.

The future of fintech belongs to those organisations that can master data from across the enterprise—front to back office—to drive their decision-making. To do this, KPMG professionals believe companies will need to become “connected enterprises.” These are organisations that use data and digital technology to function more smoothly, develop innovative products, connect with customers and suppliers, and give employees the tools to succeed. A clear focus on what they do best can help ensure that technology investment is not spread too thinly, with a growing use of strategic partnerships to access new capabilities, accelerate expansion and help to reduce costs.

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 the modern fintech. 

  1. Customer: Rising demand for wider, more personalised choices and a connected experience
  2. Competition: Fintechs may need to embrace “co-opetition”-style strategic partnerships
  3. Product: Fintechs innovate to stay connected to changing customer demands and disruptive new technologies
  4. Technology: The rise of decentralised financial ecosystems
  5. Regulatory: Growing regulatory scrutiny necessitates investment in regulatory and compliance resources 
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Future of fintech

This paper considers some of the key signals of change in the market, and the types of business models likely to emerge, as financial services companies—particularly banks—ponder whether to “own” the customer interface or to act as providers to other companies that offer a wide range of products in addition to financial services.

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