Feature
Tax & Accounting More than a quarter of asset managers are not at all
familiar with Blockchain, while 61 per cent of insurers are not at all or only slightly familiar with the technology. Blockchain and disruptive ledger technologies offer
an once-in-a-lifetime opportunity for financial services companies to transform the way they do business. The lack of understanding of Blockchain technology and its potential for disruption pose significant risks, and firms that fail to understand the impact are underestimating Blockchain’s opportunities and threats. How, then, should financial services companies
respond to the wider threat posed by FinTech? For many, the answer is to collaborate with the innovators, though 25 per cent concede they have, as yet, had no interaction with new market entrants.
‘Those who do not act now are at risk of falling behind as FinTech changes the industry from the outside’
Partnerships with FinTechs are currently the most popular type of collaboration. The survey revealed that almost a third (32 per cent) of established companies are already involved in a partnership with a FinTech. However, these alliances aren’t necessarily straightforward. IT security, regulatory uncertainty and business model differences are all potential challenges for incumbents working with FinTechs. Nor will working together always be easy – more than half (54 per cent) point to differences in management and culture, which seem inevitable as large, hierarchical companies come together with small, flat start-ups. Many companies also point to problems with operational process compatibility. To help combat this and facilitate effective
partnerships, PwC works with Startupbootcamp, a global network of industry focused startup accelerators, that gives startups direct access to an international network of the most relevant partners, investors and mentors in their sector. We work with Startupbootcamp to help give FinTech startup companies access to opportunities in the wider financial services industry. In summary, there is now a pressing need for
established financial services businesses to capture the benefits FinTechs offer. The disconnect between the sector and its customers has widened in recent years – with trust and engagement in increasingly short supply – and traditional players are finding it difficult to offer the service required. Given how fast technology is changing, no business
can afford to rest on its laurels. As competition hots up, the result will be a reduction in margins and a loss of market share for traditional financial institutions. Those who do not act now are at risk of falling behind as FinTech changes the industry from the outside – now is the chance to embrace the opportunity that the FinTech phenomenon offers.
46 CHAMBERLINK June 2016
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