Opportunities vs Challenges

  • The role of fintech seems to be better understood in some of the financial centers such as NY, London and Hong Kong. Other markets particularly the emerging ones have lagged behind. This implies a challenge as well as an opportunity.
  • Established players and startups face very different challenges. Despite sizeable investments, bankers have yet to fully diffuse the role of innovation through internal operations. 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. This will frame the boundaries of competition in the years to come.
  • Financial markets have a multitude of silos. Fintech start up do not have experience in servicing to financial services companies as they mostly offer piecemeal solutions.
  • The number of investors goes up but there will be a learning curve with mistakes for both buyers and sellers. Another challenge is to find quality partners that will add value to the business strategy.
  • 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 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.
  • Payments will remain the leading segment for a while. However, other segments will grow faster to fill the gap.
  • Unique, easy-to-access, high value add, less hassle, low cost platforms will succeed and survive. Regulations will be one of the keys in determining the winners.