By Aisling Finn on Thursday 27 May 2021
The report found that the majority of people think fintech has increased collaboration in the industry and helped to push new products to market faster.
Fintechs continue to solidify their place on the global financial stage, despite consumers still favouring traditional banks, according to a recent report.
The report, which was published by French consultancy firm Capgemini and financial non-profit organisation Efma, highlighted the continued efforts of fintech companies to chip away at their incumbent counterparts’ market share.
According to the findings, 25 per cent of consumers are actively looking for faster delivery, personalised services and convenience and would try banking products from new fintechs, over a traditional provider.
“Pandemic fallout has made the traditional retail banking environment even more demanding. For incumbents to remain relevant, now is the time to embed finance within customer lifestyle and embrace platform-based models—procrastination is no longer an option,” said CEO of Efma, John Berry.
Half of the executives surveyed said that the rise of digital banking is also contributing to bringing products to market faster and 52 per cent said it is helping to encourage collaboration within the industry.
Despite this, trust for incumbent banks remains high, with over two-thirds (68 per cent) of consumers saying they would try a digital-only offering from their current banking provider.
“Fintech-inspired digital journeys need to become crucial strategic paths for banks across the board. However, players need to be sharp and specific as they move,” Anirban Bose, CEO of Capgemini’s financial services and member of the Group Executive Board, added.
“There is no one-size-fits-all approach, and banks cannot create all digital subsidiaries equally,” Bose comments. “Players capable of achieving long-term growth and profitability today will be tomorrow’s Fintech-era success stories.”
Fintech deals also saw a spike, with the fintech sector seeing a jump of 11 per cent year-on-year deal activity in the last quarter of 2020. Later-stage fintechs also saw a nine per cent increase in deal activity from 2019 to 2020.
Additionally, the report found that consumers are increasingly focused on finding more sustainable options.
Nearly two thirds (65 per cent) of consumers globally say that they want banks to reduce their carbon footprint by turning to digital processes, consuming renewable energy and offering biodegradable cards—something that fintechs are already doing.
Fintechs continue to drive innovation, keep the incumbents on their toes and chip away at the stronghold traditional banks have over consumers.