Fintech: shaping the financial sector's future

Fintech: shaping the financial sector’s future


PwC has recently published a report on how Fintech is shaping financial services globally and  how financial institutions are looking for strategic answers to keep up with the fast pace of change. Fintech has been accelerating the pace of change at a remarkable rate and is shaping the financial sector globally.

Internet has changed and reshaped many industries from scratch and the financial sector holds no exception to this fact. Fintech is a general term which is used to identify a considerable array of new financial products and services enabled by the use of technology; it also represents a vast digital territory where the lines between financial and non-financial service providers are blurred. Fintech is rapidly growing in The Netherlands and other parts of Europe.

Results on the fintech surveys

According to Holland FinTech, the Dutch share in fintech funding amounts is close to 21%. The Netherlands has been a preferred location for fintech organizations due to the infrastructure, international focus, presence of peers and language skills. The pool of fintech organizations has become large enough to create an annual top-50 list of Dutch fintech organizations. The pressure that fintech companies exert on financial institutions will lead to transformation.

As per the survey conducted by PwC, customer behaviors are at the forefront of Fintech revolution. The customers are rapidly adopting new technologies and over the next five years more than 60% of the clients will be using mobile applications to access financial services. Traditional financial institutions are lagging behind in order to effectively respond to the evolving needs of the clients. Fintech is challenging the orthodox domestic models of banking and insurance and redefining the customer experience in the financial sector by providing innovative solutions.

Analysis & Opinions

New technology-driven business models such as robo-advisors are rewriting the rulebook of financial advising by bypassing the human financial advisor. Technology-driven models are slowly eliminating the role of intermediaries played by financial organizations. Majority of the survey respondents feels that consumer banking will be most disrupted followed by payments and SME banking in the coming five years by the Fintech revolution. Blockchain technology also shows huge potential but is seriously underestimated. But, there is lack of trust on IT security capabilities of Fintech companies.

Even with the benefits mentioned above, more than 22% respondents do not see any major challenge by the Fintech companies to their business. This might result in strategic complacency and may make them more vulnerable to disruption. However, a large share of respondents sees Fintech as a threat and will reconsider their corporate strategy.
Fintech has other aspects which will impact front and back-office operations and disrupt the existing traditional model. The net impact of all aspects will result in enhancing operational capabilities and dramatically reducing the cost. Traditional financial institutions must leverage the Fintech ecosystem to reduce costs and improve customer retention.


Fintech is already producing new and alternative business models which are reshaping the financial world. Traditional financial institutions must familiarize themselves with the Fintech challenges. A better understanding of the fintech activities will result in better co-operation with the representatives of these companies. Regulations on Fintech companies need to be addressed as it provides lack of clarity which may affect co-operation, trust and innovation.
You can find the report by PwC here.

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