Financial institutions feeling fintech heat, says PwC study

Financial institutions are increasingly at risk of losing business to fintech innovators, with 67 per cent already feeling the heat, says a PwC study.
Incumbents are also looking to explore partnerships with the new entities to foster innovations, it added.
Consumers in India are increasingly getting attracted to non-traditional financial service providers, starting with payments and fund transfers.
According to PwC's Global FinTech Report, 67 per cent believe their business is at risk from financial technology (fintech) firms and as many as 95 per cent of incumbents seek to explore fintech partnerships to boost innovations.
"A majority of the players say they are embracing FinTech and seek to utilise it to grow and transform their businesses. FinTech to us is really about the interplay between different players in the ecosystem and how they work together to disrupt the Financial Services industry. The power of FinTech lies in collaboration," PwC India Partner and Leader - FinTech, Vivek Belgavi said.

In India, 67 per cent financial institutions acknowledge that non-traditional fintech poses a threat to their businesses, lower than the global average of 80 per cent, indicating that the market in India is not yet as matured as it is globally.

As per the report, consumer banking and payments and fund transfers are the segments which are already witnessing disruption, with a maximum number of consumers already utilising the services of fintech players in these segments.
Rest of the segments -- especially lending and wealth management -- are poised to follow suit, it added.
The entities which are most likely to disrupt the industry are intuitively start-ups. However, other entities like social media platforms and e-tailers have also been cited as the source of disruption.

The analysis in this report is based on a nationwide survey of 45 Indian financial services and fintech executives, mapped against a global survey of 1,308 participants from 71 countries and also includes insights and proprietary data from PwC's DeNovo platform.