Financial technology booms as digital wave hits banks, insurance firms

With technology pressing the financial sector to change its systems and processes, banks and insurance companies are being urged to embrace the digital wave.

Financial technology booms as digital wave hits banks, insurance firms

Industry players said mobile, social, analytics and cloud computing are four key elements of the new banking era in Asia, and these will be the game changer for how financial firms operate and interact with one another.

In recent years, the financial technology (FinTech) segment has been booming, with more than US$12 billion in investments worldwide in 2014. According to Accenture, that tripled the size compared to a year ago.

Speaking at a conference organised by Next Bank Asia on Wednesday (May 27), industry players said banks are increasingly partnering with start-ups, technology firms and other credit companies to explore innovative ideas and solutions. The latest focus is on mobile transactions.

“The banks started very much with online banking as the first big foray into digital, but it’s very quickly now moved to mobile banking, mobile solutions so online banking has become more just a piece in the value chain,” said Mr Marc Mathenz, managing director of Asia Pacific International Group at Fiserv. “The value being created now going forward is actually on the mobile banking side so a lot of innovation is around the handset, how the bank delivers to the handset and the way the customer responds.”

With new technologies catching on, industry experts said the financial sector will itself undergo significant changes.

Next Bank’s founder Rob Findlay said: “I think you’ll see some consolidation of the big brands, you might see some rising of new banks or organisations that aren’t typically banks, you’ll see some other brands coming from the side that you would never associate with a bank in the past but are now doing banking as one of their services, so certainly the players will be different in five to 10 years’ time.”

“My hope is that banking in five or 10 years’ time will be a much more inclusive activity for all its people in Asia who don’t have access to bank accounts but also much more productive and personal for those of us who do,” he added.

With Singapore as a key financial hub in the region, experts have said it is in a good position to build a thriving FinTech sector, if it can attract more entrepreneurs and venture capitalists eyeing opportunities in this field.


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