Traditional firms are investing big time in emerging technologies to improve operations and experience as half of banking customers across the globe are using products or services of at least one financial technology firm, says a report.
According to the first World FinTech Report (WFTR) from Capgemini and LinkedIn, in collaboration with Efma, financial technologies (fintech) are gaining momentum and mindshare among younger, tech-savvy and affluent customers.
Emerging markets top the chart in terms of adoption rate as over 75 per cent of customers in China and India report using services provided by financial technology firms, followed by the UAE and Hong Kong, the report said.
Financial technology has made the greatest inroads in investment management, where 17.4 per cent of customers rely on them solely and another 27.4 per cent use them in addition to their traditional providers.
Though financial technology is gaining momentum, overall customer experience and trust remain low. Only 23.6 per cent of customers say they trust their financial technology provider compared with 36.6 per cent for traditional firms.
Customers noted traditional financial institutions still hold some advantage over fintech providers when it comes to fraud protection, quality of service, and transparency.
"Fintechs are largely gaining momentum by meeting needs traditional players have yet to address, but many fintechs lack the transparency required to earn the trust of their consumer audiences to capitalise on these opportunities," Penry Price, Vice-President, Marketing Solutions, LinkedIn, said.
"Financial services senior executives are seeing fintechs in a whole new light as they see greater opportunities to collaborate, but are also making significant headway in building more agile, in-house fintech capabilities," said Thierry Delaporte, Head of Capgemini's Global Financial Services Business Unit.
According to the report, traditional financial services firms can unlock innovation by discovering new technologies, devising ideas and insights into business models, deploying aligned executives to support innovation, and sustaining innovation by improving efficiency and implementing best practices.
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