This PwC report assesses the rise of new technologies in the financial services sector across the globe, the potential impact of FinTech on market players and their attitudes regarding the latest in technology developments. Additionally, it offers insight as to the responses of the sector to this ever-changing environment.
Our analysis reflects the responses of 544 CEOs, heads of innovation, CIOs and top management involved in digital and technological transformation across the financial services industry in 46 countries, including New Zealand. Globally, we found that 83 per cent of respondents from traditional financial services firms believe part of their business is at risk of being lost to standalone FinTech companies, reaching a staggering 95 per cent in the case of banks.
Globally, 67 per cent of financial services companies ranked pressure on profit margins as the top FinTech-related threat, followed by loss of market share (59%). One of the key ways in which FinTechs support the margin pressure point through innovation is step function improvements in operating costs. For instance, the movement to cloud-based platforms not only decreases upfront costs, but also reduces ongoing infrastructure costs.
In New Zealand, it’s difficult to assess whether our relatively advanced banking system and can-do culture is making it easier for FinTech companies to emerge – or harder, due to the high quality and innovation of our infrastructure, banks and insurers when compared to other parts of the world.