A large majority of financial institutions are fearing a loss of revenue to standalone FinTech companies, according to latest research from PricewaterhouseCoopers (PWC).
A new report reveals financial institutions are increasingly likely to lose revenue to innovators with 88% believing this is already occurring, up from 83% in 2016.
According to the report, global firms on average believe up to 24% of their revenue is at risk.
In addition, 82% of North American market participants believe revenue is under threat, up from 69% in 2016.
The report, based on survey responses from 1,300 firms globally, also states a “mutual understanding” between FinTech start-ups and larger financial firms is emerging, driven by start-ups requiring access to capital and customers provided by larger institutions.
Alternatively, the report indicates start-ups hold the key for larger institutions to overcome legacy technology and customer communication issues.
“FinTech collaboration, and innovation more widely, is not about jumping on the latest bandwagon – it’s about finding the best, most efficient way to carry out your business strategy and ultimately better serve your customers,” said Manoj Kashyap, global FinTech leader at PwC.
Other results show 77% of global financial services companies plan to adopt blockchain in live production systems by 2020 and almost a quarter consider themselves ‘extremely’ or ‘very’ familiar with the technology.
Speaking at a Global Custodian’s recent Leaders in Custody event, participants said the industry had “woken up” to the impact posed by technologies such as blockchain.
“Banks and global custodians will increasingly be digitalising their propositions taking more people out of the equation,” said Stephen Bayly, CIO of HSBC Securities Services during last month’s event.
“This means banks and custodians will become more like FinTechs in terms of money spent and various techniques adopted.”