New | Hong Kong banks can benefit from fintech collaborations
Managers can use technology to boost productivity and innovation capabilities of employees
Bank CEOs face more pressing, public issues than ever before. From Brexit to ongoing regulatory probes, to cost-cutting and compensation debates – the C-suite is crowded with challenges.
As if that weren’t enough pressure, banks are also under new threats of competition.
Financial technology companies are taking on the big banks that dot Hong Kong’s skyline on a myriad of fronts, from financial advice for student loans to peer-to-peer lending to crowd-funding.
Fintech investment in Asia-Pacific more than quadrupled in 2015 to US$4.3 billion. It is now the second biggest region for fintech investment after North America – accounting for 19 per cent of global financing activity and up from just 6 per cent in 2010, according to a recent Accenture study. During the first quarter of 2016 investments totaled US$2.7 billion, representing 51 per cent of the US$5.3 billion invested into fintech companies globally.
The question is: How should bank executives respond to the fintech challenge? Compete or collaborate? Both the banks and fintech companies are reaching a similar conclusion: collaborate.
Banks have much to gain from the massive infusion of VC investment in fintech. By collaborating with these ventures, they have an opportunity to raise their game with technical innovations and get savvier to what is around the bend for financial services.
