March 30, 2016
The disruption (threat from FinTech)
A Goldman Sachs research report in early 2015 estimated that a part of the traditional financial services’ revenue ($4.7 trillion out of $13.7 trillion) is at risk of being displaced by new technology-enabled entrants which include FinTech players lending, wealth management, payments and others. The threat of FinTech is more real than before.
McKinsey’s report The Fight for the Customer: Global Banking Annual Review 2015 reveals that as much as 40% of revenues and up to 60% of the profits in retail banking businesses – consumer finance, mortgages, small-business lending, retail payments and wealth management – are at risk from a combination of various factors such as dwindling margins and competition from FinTech startups which target origination and sales, the customer-facing side of the bank.
According to a recent research report published in March 2016 by PricewaterhouseCoopers (PWC) titled How FinTech is Shaping Financial Services, top banking executives fear that more than more than 20% of the financial services businesses will be at risk to FinTechs by 2020. If we look ...