A recent survey by PricewaterhouseCoopers (PwC) shows over 90% of banks believe they are at risk at losing business to Fintech companies.
When giving the overall description of Fintech’s, PwC said: “FinTech is a dynamic segment at the intersection of the financial services and technology sectors where technology-focused start-ups and new market entrants innovate the products and services currently provided by the traditional financial services industry.”
The survey was intended to assess the rise of new technologies in the financial services sector and the potential impact of FinTechs on market players and their attitudes to the latest technological developments.
Of the firms surveyed, 20% were Fintech companies, 20% were asset management firms, 30% were miscellaneous financial services companies and 30% were banks.
When asked about what percentage of their business was at risk of being lost to Fintech’s, about 40% of non-banks said they were not at risk, while less than 10% of banks said the same.
Over 65% of banks saw Fintechs causing them a loss of market share and about 65% of banks said they believe Fintechs will put pressure on margins.
PwC claimed that the very simplicity that underlies banking products and processes for saving, lending, and business services renders the sector ripe for disruption. PwC also reported that new entrants see opportunity in disaggregating the components of traditional banking and offering targeted solutions with better servicing.
The survey saw the increase in personal devices, digital applications, and personal technologies will completely change the nature of the current banking industry.
According to an analysis by Business Insider UK, British Fintech startups have already seen at least £40 million of new investment since the referendum announcement.