In their last report ‘Financial Technology and the Corporate,’ East & Partners published numbers regarding corporate treasurers’ behaviour towards financial innovation. The research highlights the competition traditional financial institutions stumble upon when facing innovation, and draws a market map revealing a global trend in favour of fintech solutions, a preference particularly vigorous in Asia and the UK.
The research conducted by the leading business analysis firm involved 737 corporate treasurers and CFOs from the top 800 firms, across eight key markets including Australia, China, France, Germany, Hong Kong, Singapore, the UK and USA.
The findings reveals that 13 percent of corporates have either partially or fully switched financial institution, incentivized by the benefits offered by fintech innovation. The research details twenty percent more are currently considering doing so.
According to East & Partners, Asia is the most significantly impacted market, China coming first with nearly one third of its corporate having swapped financial service provider to the advantage of more innovative ones. UK and Australia are not far behind with respectively 18.2 and 17.4 percent. The French, German and US market are, within the ones scanned, the most reluctant, with less than 5 percent.
As for the corporates considering an eventual shift, numbers are higher and follow the same trend. More importantly, more than 75 percent of corporate treasurers said fintech firms would take market share away from incumbent providers over coming years, a figure climbing up to 90% in Asia and the UK. On average, respondents were not overly impressed with financial institutions’ performance to catch up with innovation. Corporates treasurers across Asia (China, Hong Kong and Singapore) were the most committed, forecasting that between 8.5 – 9.8 percent of their upcoming business investments would be dedicated to new fintech products.
An instructional finding for regtech, Risk & Compliance is considered by France (37.8 percent) and Germany (33 percent) as main area of focus for the industry; results indicate that Transaction Reporting and Anti-Money Laundering are regarded as the top two opportunity in the field.
Martin Smith, Head of Markets Analysis, stated “Global businesses are already engaging with best-of-breed fintech solutions, whether they be from new entrants or banks that are developing internally, and are not shying away from switching providers to ensure they have access to these products and services. Although banks in Asia and the UK are most susceptible to fintech competition, other markets cannot rest on their laurels, and ensure they keep developing both their digital offerings, and their positioning to ward off the increasingly competitive market.”
More details are available on CSO.com.
By Jean Leguy, Research Analyst at Holland Fintech