FinTech wave to take over financial institutions

Malaysian financial institutions (FIs) should embrace the financial technology (FinTech) wave or risk losing competitive edge, PwC Consulting Leader Andrew Chan said today.

According to 'Catching The FinTech wave', a survey report buy PwC and the Asian Institute of Cahrtered Bankers, 82 percent of FIs worry about losing to FinTech was due to regulatory uncertainty, pressure on margins and IT security.

At the Launch of ‘Catching the FinTech Wave’ survey report by PwC and the Asian Institute of Chartered Bankers at Bank Negara earlier today, Chan stressed on the importance of FIs to start adopting FinTech even on a small scale.

“We must act now. Some things will fail, some things will succeed. But can we afford to not do anything?” he Chan.

He also suggested the method of running pilot programmes for initial implementation and to scale up if the method is successful.

The rise of FinTech suggested there is a gap in the security that banks are providing for customers that can be filled with Fintech’s ability to cater to the needs and wants of the customers.

Both FIs and FinTechs need to adopt the attitude of partnerships and be prepared to learn from each other to ultimately give the customers exactly what they want.

FinTech start-ups are known for their ‘dare to fail’ attitude which is a vast contrast to the rigid attitudes of FIs.

FIs tend to focus on profitability while FinTech thrives on customer acquisition.

To create commonality in the interest of consumers, Chan says, “Regulators should step in to create a safe and level playing field for FIs and FinTech companies to allow innovation to thrive.

When asked about the anticipated development of Fintech within Malaysia, Chan said it will be seeing different waves of responses.

"The next wave will be cross-selling, where banks introduce new products to theoir existing customers based on what they already know about their customers preferences and buying behaviour to add another layer of convenience," he said.

The vast benefits that come with implementing FinTech include new revenues, differentiation and customer retention.

“Fintech is digitally disrupting the financial world and regardless of whether it is seen as a threat or an opportunity to grow by FIs, it is here to stay,” said PwC Malaysia Managing Partner Sridharan Nair.