PwC has releaed its latest Global FinTech report, which shows that New Zealand companies may be too focused on fintech start-ups and ignoring other disruptors.
A full 100% of New Zealand respondents felt that the most disruptive force in financial services in the next five years would be start-ups, compared to a global average of 75%.
PwC said local companies seemed to be overestimating the impact of start-ups and underestimating the disruptive potential of themselves and their competitors.
“This makes me think that in five years we won’t be talking about fintechs any more,” said Andy Symons, financial services leader at PwC.
“The fintech revolution won’t just be driven by start-ups. It will come from the established competitors you thought you knew, but who are already a step ahead in transforming their businesses to meet changing customer expectations.”
“The distinction we’re now seeing between fintech start-ups and incumbents is only temporary and will disappear completely as corporates realise their own transformational potential and today’s start-ups mature.
“Where today’s corporates aren’t focussing is on their existing competitors – our global respondents were twice as likely to predict disruption coming from existing financial service institutions as our New Zealand survey participants, he said.
The report said financial services companies were relying too heavily on start-ups for innovation. Almost 85% said they were entering into partnerships with fintechs, compared to 45% globally.
“The risk that comes with these partnerships is that established firms treat a fintech partnership as a chance to outsource innovation to a start-up, rather than signaling the beginning of a much wider transformation of their operations,” Symons said.
He said businesses would have to look beyond simply partnering with fintechs and create a two-speed innovation strategy if they wanted to survive the changes coming.
This would mean bringing together the best of both worlds – the existing expertise within the business; and the innovation, creativity and digitally enabled business models of today’s start-ups.
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