Financial institutions see startup financial technology firms — or fintechs — as a major part of the digital future. As evidence of this, financial institutions have invested more than US$27 billion in fintech and digital innovation since 2015.
How financial institutions
are embracing fintech to
evolve and grow
The financial services industry is undergoing a paradigm shift. Emerging technologies
like artificial intelligence (AI), machine learning, the Internet of Things (IoT) and
blockchain, combined with ever-changing customer expectations and preferences,
are redefining how financial institutions deliver services.
Remaining competitive in this constantly changing environment is an enormous
task. Banks, insurers and asset management companies are undertaking major
transformation efforts — transitioning from complex legacy technology environments
to more agile operations, and creating more efficient compliance processes that fully
satisfy evolving global and jurisdictional regulations.
Financial institutions see startup financial technology firms — or fintechs — as a major
part of the digital future. As evidence of this, financial institutions have invested more
than US$27 billion in fintech and digital innovation since 2015.1
However, corporate investment is only part of the landscape. To understand how
different organizations are approaching the strategic opportunities presented
by fintechs, we conducted a survey of more than 160 financial institutions from
36 countries. We also held in-depth interviews with executives from leading financial
institutions and our own financial services partners from around the world.
Our research shows that while financial institutions recognize that fintech is
a substantial disruptor, no single path has emerged to define how companies
should approach fintech. Leading financial institutions are pursuing many different
avenues — including partnering, buying, sourcing and investment strategies.
One key best practice across leading financial institutions is strategy: having a clear
fintech strategy that aligns to organizational objectives, considers current assets
and capabilities, and includes an execution plan for addressing gaps and mana