This past March, I had the opportunity to deliver the keynote presentation at the SAP Forum in Sao Paulo Brazil. The subject was entitled Trends in Digital Transformation. Digital
Transformation is no longer a theory, but in many regions banks must develop both the
strategy and process to handle the increase in digital transactions. This is no longer a regional trend but as banks continue to connect on the global payment network, digital payments are at the forefront.
Based on the Accenture and Technology Fund Report 2015, the following trends have been
- Global FinTech Investment will grow to at Least $6 Billion by 2018. Investment in FinTech
ventures is on the rise, and banks are helping drive it by investing in startups that could help
solve their IT problems.
- Global investment in financial services technology ventures tripled since 2008, growing from $928 million in 2008 to $2.97 billion in 2015.
- Worldwide venture capital investment in FinTech has grown four times faster than the rate of overall venture capital investment in the last three years.
- The fast growth to the convergence of several factors in the technology and the banking space, such as the spread of open source and cloud-based technologies that help cut costs for new startups will continue to rise.
- The U.S. is by far the biggest market for FinTech venture capital investment, making up 83% of the global market.
Furthermore, the October 2015 McKinsey Report reported the following trends which support
the findings of Accenture;
- Multi-channel solutions win as channels converge
- Migration to EMV ignites mobile payments
- Non-bank companies will continue to lead in P2P
- Cloud based point of sales services will further specialization
- Domestic infrastructure move to real time
- Blockchain promises innovation in corporate banking
Strategic partnerships will continue to grow and be part of the value chain. Digital Transformation is not readily embraced by all bank stakeholders. In many situations, there is resistance. Below represents a summary of reasons why banks are resisting the digital transformation trend.
- Banks continue to operate within silos with conflicting priorities
- Internal politics and the aversion to risks
- Developing simple and transparent processes continue to rank high
- In a global organization with many locations or in an organization with a clear digital capability difference between workers and change management can take some time.
Organizations are still struggling with application anarchy and legacy systems, the speed of
technology implementation, will force organizations to quickly adopt new tools to advance in
their digital journey. In some cases, moving to a complete digital bank, such Nubank in Brazil, represents a drastic shift. Consumers are migrating from using bank branches to their mobile devices in order to conduct their banking.
Some banks boast 100% digital traffic from paying bills to getting a loan. The days of walking
into a bank to open an account and getting a toaster or blender is gone! Costs continue to
dominate and banks are concerned to drive costs downward. However, when there are
opportunities, there are challenges that have to be met and future updates will address this.
The Walker Group provides business development and advisory services to FinTech
companies. Our varied market segments enables us to identify synergies and opportunities to stimulate growth as we partner with our clients to build their business. Through our one-on-
one CEO Advisory Services we have helped companies to navigate through the key business
problems, increase sales, build new revenue streams and gain new customers.
Nobiletec is a multi-national consultancy firmspecializes in B2B, B2C and P2P FinTech solutions.