Skip to main content

How Financial Services Disruption Created Opportunities

The term 'Fintech’ has been applied to describe the transformation taking place in the financial services sector across the globe. Traditional forms of payment such as cheques have been displaced by debit and credit cards. In turn, contactless payment and digital wallets will likely replace the cards.

Moreover, new and evolving banking business models have resulted in both the legacy financial services industry and fintech start-ups investing in digital technologies. Initially, the focus was an organization's website or automating aspects of their customer service call center.

Now the focus has shifted to service delivery via smartphone software apps. The savvy financial services start-up entrepreneurs embrace innovative methodologies to differentiate themselves from the incumbents, but the CIOs and CTOs at traditional banks are now starting to catch-up.

Fintech Market Development

According to the latest worldwide market study by Juniper Research, driven by the increasing acceptance of alternative approaches to traditional banking solutions, fintech platform revenues will reach $638 billion by 2024 -- that's up from an estimated $263 billion in 2019.

Technologies such as artificial intelligence (AI), machine learning, big data analytics and blockchain will be the cornerstone of fintech platform deployments. These systems will fundamentally alter the way financial services are delivered and enable fintech platforms to become the new standard.

The innovative applications of these technologies will make new use cases mainstream -- including smart contracts, loan underwriting using AI to analyze non-traditional data sources, and personalized insurance policies based on IoT-generated data.


Besides, with rising customer acceptance of new business models, traditional financial services institutions are reacting to these changes. Incumbents are attempting to replicate the fintech firms’ offerings. As an example, with digital banking offshoots (Marcus from Goldman Sachs) or new services (HSBC’s Wealth Compass).

According to the Juniper assessment, banking incumbents will likely apply new strategies to appeal to customers outside their normal target audience, such as millennials, to develop the market for their services and thereby attain future revenues.

Where incumbents find that they cannot easily replicate the fintech platforms, they are partnering with fintech start-ups. For example, the Austrian banking group Bawag is using Spotcap’s lending-as-a-service platform to support SME lending.

However, the Juniper analyst believes that the challenge would be to effectively integrate these partnerships, keeping friction low and maintaining control of the overall customer experience.

Outlook for Fintech Applications Growth

"The distinction between the fintech suppliers and traditional incumbents will blur in the 2020s; digital engagement will become the norm," said Michael Larner, market analyst at Juniper Research. "The winners will be those that provide personalization allied to an outstanding customer experience."

Meanwhile, the market study findings uncovered significant regulatory burdens imposed on financial institutions after the 2008 financial market crisis also mean that direct entry, beyond partnerships, remains unlikely in the near term for even large technology companies.

Popular posts from this blog

Mobility-as-a-Service Creates Disruptive Travel Options

Building on significant advances in big data, analytics, and the Internet of Things (IoT), more innovative transit service offerings aim to increase public transport ridership and reduce emissions or congestion within metropolitan areas. By providing these services through smartphone apps, the transit services also significantly increase user convenience, providing information on different human mobility offerings -- including public transport, ridesharing, and autonomous vehicles. Mobility-as-a-Service Market Development According to the latest market study by Juniper Research, Mobility-as-a-Service (MaaS) subscribers will generate $53 billion in revenue for MaaS platform providers by 2027 -- that's rising from $5.3 billion in 2021. Let's start with a basic definition. MaaS is the provision of multi-modal end-to-end travel services through single platforms, by which users can determine an optimal route and price. The study identified a monthly subscription model as key to incr

Robocall Mitigation Solutions to Halt Criminal Threats

If you answer the phone and hear a recorded message instead of a live person, it's likely a robocall. A robocall is a phone call that uses a computerized autodialer to deliver a pre-recorded message. In 2020, the U.S. Federal Trade Commission (FTC) received 2.8 million consumer complaints about robocalls. Offering solutions to robocalling and associated fraudulent business practices, computerized mitigation platforms are an integral part of the solution. Platforms that are focused on actionable systems to disrupt unsolicited and potentially criminal phone calls help telecom service providers and industry regulators. Issues of whether one-size-fits-all developments are sufficient to be effective across the spectrum need to be addressed, and whether a single telecom network operator working unilaterally with a third-party platform could compromise desired or mandatory industry-wide standards. Robocall Mitigation Market Development According to the latest worldwide market study by Jun

Why a Distributed Workforce will Raise Productivity

While most senior executives at progressive organizations have already evolved their human resource policies to accommodate employee desire for flexible working models, others still resist change. Unfortunately, many of the laggards are now experiencing the "Great Resignation" phenomenon. The global pandemic required business leaders to rethink when, where, and how their knowledge workers and front-line employees perform their work. Yet even with the ongoing pandemic recovery slowly underway, some organizations are still trying to determine their workforce approach. According to the latest worldwide market study and recent survey data from International Data Corporation (IDC), stability and geography will likely define the balance of future work strategies. Distributed Workforce Market Development On a global basis, physical office sites are expected to be the dominant location for work as legacy organizations eventually find themselves in a more stable environment. However,