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Bangkok Post

By Suchit Leesa-Nguansuk
Financial institutions should work with financial technology (fintech) start-ups in three main categories to complement each other’s know-how, says a global research firm.
Payment, remittance and customer analytics are growing fintech areas in which banks and fintech startups can collaborate, as banks have customer skills and data, while start-ups offer innovative services and are dynamic, said Michael Araneta, associate vice-president of IDC Financial Insights, a finance research unit of IDC.
Behaviour analytics, blockchain, cloud adoption and consumer mobile payments are the top technological trends affecting financial institutions in 2017.
“In 2017, banks have started fintech initiatives or are positioning themselves as fintech startups,” Mr Araneta said at the Fintech Dynamics in Asia forum.
There are opportunities for platform-building and sandbox opportunities as services can scale up, while the setting of the application programming interface standards are going to be fundamental to co-innovation and facilitating exchanges in innovation between banks and startups.
“This is a great opportunity for banks to look at what they can contribute to this cross-industry collaboration, such as working with a retailer [or] a bank working with an airline,” he said.
Data monetisation also provides an opportunity for banks to reuse their extensive data for analysing consumer spending and purchasing behaviour.
Citing statistics from 33 successful Fintech collaborations tracked by IDC Financial Insights, Mr Araneta said the average time for a fintech-bank collaboration to shift from ideation to market is at least one year. This is lengthy in startup terms, with the length of process attributed to regulations and compliance issues.
“A majority (61 per cent) of these 33 fintech startups moved from idea to proof of conception in six months, and another 75 per cent moved from POC to deployment after another six months,” he said.
Fintech is growing rapidly, with regulators in Asia positioning themselves as hubs of innovation.
“Regulators are competing among themselves to be the most open and innovative. 2017 will hopefully be a year where a lot of regulators will relax their guidelines,” Mr Araneta said.
He said banks are still focused on non-digital technologies and initiatives. A lot of money is also spent on traditional big data and analytics, or enterprise transformation around security and fraud management, leaving a great opportunity for fintech start-ups to make their mark, he said.
Banks will need to find ways to offer “frictionless financial services” between them, Mr Araneta said.
“By 2018, we think there will be 18 channels that will be used between banks and their customers,” he said. “There will be a lot more channels for customers to interact with financial institutions. The frequency, duration and interactions will expand as well, together with cross-industry collaboration.”
Read the original article at Bangkok Post


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Photo: Bangkok Post

Tech

IT market group IDC identifies behaviour analytics, mobile payments, blockchain and cloud technology as top trends


Fintech

Mobile payments