4 in 5 Singapore financial firms tag innovators as threat to revenues
In turn, a majority of banks plan to increase fintech partnerships.
There is a growing concern over financial firms in Singapore, with 80% of institutions fearing they will lose revenues to standalone fintech companies. However, almost 9 in 10 banks are planning to increase fintech partnerships, revealed a new PwC report.
PwC fintech and financial services leader Antony Eldridge said that Singapore has a unique regulator's approach which helps nurture fintech growth by providing a conducive ecosystem.
"The introduction of regulatory sandboxes is a prime example of how the regulators here are creating an environment where new technologies can be experimented whilst minimising risks to consumers," he said.
The healthy number of banks wanting to collaborate with fintech firms indicates that there is real room for growth in Singapore’s fintech ecosystem, which comes at a good time amidst a growing acceptance of non-traditional fintech solutions by consumers.
"That, in turn, is driving fintech solutions to grow beyond low value, high volume to address more advanced and complex needs of client groups such as in asset and wealth management," noted Eldridge.
One driving factor behind these partnerships is an increasing fear within the industry that revenue is at risk to standalone fintechs, with 88% of financial services respondents globally seeing it as a real threat.
The report noted that there is an emerging mutual understanding between financial firms and fintechs. On one hand, fintech companies can benefit from financial institutions’ existing processes and infrastructure which would otherwise be too costly for them to undertake on their own.
On the other hand, incumbents can leverage the innovation and new technologies from fintech players to overcome legacy issues, sharpen operational efficiency, and respond to customer demands for more innovative services.
In terms of opportunities related to the rise of fintech, expanding products and services emerged as the number one opportunity in Singapore, with 3 in 5 firms saying so.