Since 2010 more than $50 billion has been invested in almost 2,500 financial technology (fintech) start-up companies as new innovators redefine the way in which we store, save, borrow, invest, move, spend and protect money. Recent Accenture research identified the latest global fintech trends, ranging from the challenges and opportunities that fintech companies pose for incumbents in financial services to how technology giants are redefining the landscape and the pervasiveness of technology platforms.
Trend 1: Tech brings disruption. Technology giants such as Google, Apple, Facebook, Amazon and Alibaba (GAFAA) are redefining the customer experience around the periphery of financial services. Every FS company will need a platform strategy, even if it’s just finding the right role in ecosystems driven by other companies. They will need such a strategy to protect the profitability of their core business from new forms of platform-driven competition, and to grow with the evolving landscape.
Trend 2: Successful fintech IPOs. Last year saw companies such as Square, WorldPay and First Data achieving multi-billion-dollar market capitalizations, larger than many established financial institutions. These players are going after customers that traditionally belonged to banks. New models are challenging every service a bank provides.
Trend 3: APAC’s fortunes rise. Fintech investment in Asia-Pacific more than quadrupled in 2015 to $4.3 billion. It is now the second biggest region for fintech investment after North America, accounting for nearly a quarter of all global financing activity and up from just 6 percent in 2010. APAC’s recent activity in financial and insurance technology investments, start-ups and innovation labs shows it is excelling in embracing digital disruption.
Trend 4: Rise of insurance fintech. Insurance is rapidly emerging as the next big thing in fintech, with investment in firms with insurtech propositions more than tripling from 2014 to 2015, to approximately $2.6 billion. These new entrants utilize digital technologies, such as wearable devices, smart objects and connected cars, offering customers tailored services for less.
Trend 5: From competition to collaboration. Many financial services institutions recognize the role fintechs can play in their evolution; and fintechs are increasingly viewing incumbents as potential partners. In order to find and nurture the next generation of digital talent and solutions, some FS institutions are also creating innovation labs or teams.
Trend 6: Developing an ecosystem. Digital technologies, such as wearable devices, smart objects and connected cars, will power new insurance ecosystems as insurtech continues its rise. New partnerships and cross-industry alliances will be paramount to success in the evolving landscape.
Learn more: Fintech and the evolving landscape: landing points for the industry (PDF)