Knowledge & Insight

Fintech – changing the financial services landscape

Wed 2 May 2018

Stone Executive’s specialist Fintech headhunters understand the unique challenges facing firms in this sector. With unrivalled connectivity and a professional network that spans the globe, our Fintech executive search team is ideally placed to quickly identify high-calibre candidates for a broad range of senior management board level Fintech roles.

When the first fintech firms began to emerge just a few years ago, many insiders believed that their disruptive influence was about to radically change the financial services landscape. Yet while their impact hasn’t been quite as dramatic as some predicted - driving evolution rather than revolution - it’s clear that the pace of change is accelerating. And although they have yet to usurp the incumbents from their positions of power, the role and scope of fintech firms is expanding, and their operational agility is beginning to present a genuine threat to the dominant industry players.

In an insightful new paper, Deloitte have explored the main ways that fintech could drive change in the financial services competitive arena. 

Revenue distribution

Digital technology is reassembling the financial services value chain by enabling firms to diversify their service proposition and expand into new areas. For example, online retailers now process customer transactions via web-based applications that make a traditional merchant account superfluous. And investment firms are utilising exchange-traded funds to acquire new personal customers who would previously have deposited funds in a traditional savings account. So the distribution of transactional revenues is shifting in favour of fintech companies, and away from traditional FS firms. So as new technologies make it ever easier to bypass existing intermediaries, traditional players will need to find new opportunities to add value.

Agile digital platforms

Facilitating enhanced customer choice is a key competitive differentiator in many consumer marketplaces, and financial services is no different. Fintech pioneers are responding to customer demand by creating agile digital platforms than are not constrained by geographical boundaries or physical limitations. And just as retail customers now expect to be able to browse and buy effortlessly online, so financial customers will soon be able to acquire credit and asset management services from the kind of digital store (offering products from competing brands) that retail customers are already familiar with. These platforms will be equipped to record market data from all transactions, reinforcing the position of the platform operator.

Artificial Intelligence

As advances in artificial intelligence gather pace, so the range of tasks and roles where AI can be deployed continue to expand. In manufacturing, robots have long since replaced manual labour in a great many roles. And we are all now familiar with navigating automated customer journeys in a variety of settings, particularly in banking and financial services. So as AI allows robots to move beyond simple repetitive tasks and into the realms of true decision making, traditional FS firms will need to collaborate with fintech companies in order to implement and manage a new generation of smart technology. Achieve this, and they will pave the way for a new generation of innovative experiences and services, facilitated by artificial intelligence. Make no mistake, robots are steadily climbing the career ladder.

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