Capgemini has released the findings of a new report published by The Australian Digital Transformation Lab, a joint venture between the University of Sydney Business School and Capgemini.
The report finds that while Financial Technology (FinTech) firms are seeking to disrupt the larger players, the opportunities in financial services are based on collaboration rather than competition.
The report finds that technology giants such as Apple and Amazon threaten the emerging FinTech industry and Australia’s traditional banking sector. To survive this threat, the FinTech industry and the banking sector should work together, the report says.
“We commonly think of FinTech as small, digitally-native companies that fundamentally change the financial services market, disrupting and displacing incumbents,” says professor Kai Riemer, University of Sydney Business School.
“But what’s becoming clear is that it’s difficult for FinTech firms to prove themselves as a viable option for everyday consumers despite the innovation in services.”
Riemer continues, “that’s not to say incumbents are able to sit back and enjoy their current status – customers are increasingly exposed to new FinTech options that offer convenient, engaging services. The future will lie in exploring collaboration.”
“Banks and FinTechs should adopt a strategic approach and collaborate throughout the innovation process, leveraging each other’s’ strengths to deliver maximum benefits from digital initiatives,” comments Nicolas Boussand, director of Digital Customer Experience, Capgemini in Australia and New Zealand.
The report concludes that FinTechs and the banking sector can learn from each other to overcome the challenges in digital transformation they are confronted with.
Fintechs need help with scaling-up, while incumbents can benefit from learning how to harness digital technology.