UBS Report on Whether FinTech Is a Threat or an Opportunity

According to a survey by UBS, customers who are likely to use FinTech services during the next 12 months are more in number when compared to the customers who have already used it. This upward trend signals the era of good acceptance when it comes to FinTech services.

When it comes to banks offering services in partnership with FinTech companies and future intentions to form partnerships, there seems to be evidence of co-creation by leveraging each other’s strengths. This approach seems to be gaining traction with a lot of big banks partnering with young startups. This is further evidenced by the fact that banks are setting up innovation labs/accelerators to nurture the talent within the FinTech startup community.

According to the UBS report, the percentage of people who would consider taking a P2P loan in the next 12 months is relatively high in developing countries like Kenya, Indonesia, Thailand, Mexico, etc., when compared to the developing countries.

So, is FinTech really a threat?

According to the below figure, the most severe threat is perceived to be in the area of payments followed by forex and remittances. But it has also been found that in sectors like P2P consumer lending, P2P business lending, and deposit-taking, FinTech is not a threat.


Despite perceived risks, bank management surveyed by UBS Evidence Lab indicated a 3.8% revenue uplift (net of cost release) arising from the impact of FinTech over the next three years, although expectations by management in developed markets were more modest (1.3% uplift) than in emerging-market banks (5.1%). Assuming a 3.8% net revenue boost, UBS's analysis suggests a potential rise in bank ROE globally of up to 37bp by 2019. That is good news for the banks.