In a new report from BI Intelligence, we provide a detailed overview of the fintech ecosystem, explain the challenges and opportunities for incumbents and startups and evaluate the key areas of finance being disrupted by new technologies. We also determine which financial sectors are most vulnerable, which are still shielded from immediate disruption, and what that means for new entrants and financial giants…
Here are some key takeaways from the report:
- Fintech — financial technology — is an umbrella term describing disruptive technologies in financial services. Fintech has transformed the way money is managed. It affects almost every financial activity, from banking to payments to wealth management. Startups are re-imagining financial services processes, while incumbent financial services firms are following suit with new products of their own.
- Established players and startups face very different challenges. Banks are investing more heavily in innovation, however, they haven’t yet fully diffused their innovation strategies throughout their organizations. Meanwhile, startups are trying to navigate the regulatory landscape. Banks will have to find a way to develop new platforms while overcoming legacy infrastructure; startups will have to find a way to scale out their business while facing increased regulations, higher costs, and larger infrastructures that will be more difficult to change and manage.
- The blockchain is a wild card that could completely overhaul financial services. Both major banks and startups around the world are exploring the technology behind the blockchain, which stores and records Bitcoin transactions. This technology could lower the cost of many financial activities to near-zero. This would have a dramatic effect on big banks, which currently face high operating costs. It’s also disruptive in that it could disintermediate many financial processes.