The rise of the fintech phenomenon is something that’s had an impact on various aspects of the banking sector. These companies specialise in both finance and technology, therefore providing a double offering to clients.
Figures from Accenture investment show fintech expanded by 201 per cent across the globe in 2014. At present, Australia has the fifth-highest use of fintech in the world, which may lead accountants for dentists in Strathfield to ask how they can ride this increasingly popular wave.
Why banks are worried
A report released by PwC last month suggested that it is banks who are the most fearful of fintech’s potential. Of the traditional financial services firms polled, 83 per cent said they believe at least part of their operations is at risk – this increased to 95 per cent among banks.
It’s essential to maintain pace with changes that occur in the wider market..
Among the greatest concerns is pressure on profit margins and loss of market share. Bankers forecast they could lose almost a quarter (24 per cent) of their market share to this type of company.
Keeping pace with the digital age
As accountants for pharmacists in Bankstown will no doubt be aware, it’s essential to maintain pace with changes that occur in the wider market. It’s evident that customers expect more than just traditional services from financial providers, as they would much prefer a value-added offering.
Australian Bureau of Statistics data shows just how much the digital age matters to the nation’s businesses. In 2011-12, the group revealed that 91.9 per cent of businesses had internet access – this increased to 94.7 per cent by 2013-14.
Meanwhile, the number of companies with a social media presence has almost doubled over the same time frame, increasing from 18.1 per cent to 30.8 per cent.
Roy Morgan believes it’s younger consumers who are adopting this mind set. It estimated that as many as 4.5 million Australians have a digital focus when choosing goods and services, as they go in search not for product-based sales, but rather sleek user experiences.
Fintech companies are making their mark – and causing concern.In fact, 64 per cent of what Roy Morgan calls the “Desire Economy” would much rather never set foot in a traditional bank branch ever again. Instead, they’d rather be given digital means of interacting with financial providers and getting the advice and services they need.
If accountants are going to move with the times and embrace the opportunities from the rise in fintech’s popularity, then now is the time to do it. New technologies are being developed all the time and this is likely to be the case for years to come.