How Fintech Is Shaping Financial Services

It is difficult to imagine a world without the internet or mobile devices.

They have become core elements of our lifestyle and have brought a high degree of disruption to virtually every area of business.

The financial services (FS) industry is no exception; the digital revolution is transforming the way customers access financial products and services.

Although the sector has experienced a degree of change in recent years, the constant penetration of technology-driven applications in nearly every segment of FS is something new.

At the intersection of finance and technology lies a phenomenon that has been accelerating the pace of change at a remarkable rate and is reshaping the industry’s status quo – it is called FinTech.

What is FinTech?
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.

As such, FinTech is gaining significant momentum and causing disruption to the traditional value chain.

In fact, funding of FinTech start-ups more than doubled in 2015 reaching $12.2bn, up from $5.6bn in 2014 based on the companies included on our DeNovo platform.

Cutting-edge FinTech companies and new market activities are redrawing the competitive landscape, blurring the lines that define players in the FS sector.

Our objectives and Approach
This report assesses the rise of new technologies in the FS sector, the potential impact of FinTech on market players and their attitudes to the latest technological developments.

Additionally, it offers strategic responses to this ever-changing environment.

Our analysis is based on the following:

1. Primary data derived from the results of a global survey that includes feedback from a broad range of players from the world’s top financial institutions. For this study, we surveyed 544 respondents, principally Chief Executive Officers (CEOs), Heads of Innovation, Chief Information Officers (CIOs) and top-tier managers involved in digital and technological transformation. Our survey was distributed to leaders in various segments of the FS industry in 46 countries.
2. Insights and proprietary data from DeNovo, PwC’s Strategy& platform composed of a 50-member team of FinTech subject matter specialists, strategists, equity analysts, engineers and technologists with access to over 40,000 public and proprietary data sources.

In the first section, we explore FS market participants’ perspectives on disruption. Next, we highlight the main emerging FinTech trends in the various FS industries and the readiness of the market to respond to these trends.

Finally, we offer suggestions about how market players should strategically approach FinTech.