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Lending and Financing, the Areas Most Impacted by Fintech

The financial sector increasingly recognizes fintech companies as strategic allies with which, through collaboration, they will be able to compete with new companies, especially technology giants (BigTech), which with each iteration expand their portfolio of financial services, the consulting firm said in a statement. In Mexico, the areas of the financial sector that will be most impacted by fintech over the next three years are lending and financing (53%),

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In Mexico, the areas of the financial sector that will be most impacted by the development of the fintech sector over the next three years are lending and financing (53%), customer experience (49%), payments (48%), investment (asset & wealth management, 27%) and deposits (22%).

At the same time, the financial sector will adopt emerging technologies such as Artificial Intelligence (46%), Data & Analytics (41%), Blockchain (34%), and application programming interfaces or APIs (31%), mainly.

In addition, the Senior Management of the sector considers that customer experience (49%), the use of fintech technology (46%), and new business models (41%) are the main disruptors of this industry, so it would be essential to consider remodeling of the business architecture and processes of the companies.

If you want to find more details about the evolution of the fintech sector and to read the latest financial news in the world, download for free our companion app Born2Invest.

The pandemic has played a crucial role for the development of the fintech sector

According to the study ‘Fintech development in Mexico. An ecosystem to accelerate transformation’, by KPMG in Mexico, the sector’s panorama changed completely, as Covid-19 implied complex challenges and unknown risks that became visible.

For Maricarmen García, partner of Financial Risk Management Advisory at KPMG in Mexico, financial institutions are clear about the leading role that fintech companies have in the future of this industry, regarding their ability to solve urgent and complex problems through real and concrete solutions.

The financial sector increasingly recognizes them as strategic allies with which, through collaboration, they will be able to compete with new companies, especially technology giants (BigTech), which with each iteration expand their portfolio of financial services, the consulting firm said in a statement.

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Are there any fintech companies that can compete with traditional financial institutions’ services?

-46% of senior management believe that a fintech company does exist, and is already operating.

-26% believe that, for the moment, they cannot be considered competitors.

-17% say that there is a fintech planned in the short term that could compete with them.

-11% do not consider these types of companies to be competitors now or in the future.

The organization has a strategy to respond to the fintech reality:

-65% have a development strategy

-20% are not sure

-15% do not have one

On business relationships with any fintech:

-52% are in experimentation stages through a proof of concept.

-28% have not found a fintech company that meets their needs

-11% do not include these initiatives in their current strategy

-9% have not achieved the endorsement of internal control areas.

The challenges for companies that have integrated the services of a fintech company are:

-50%, requirements imposed by internal control teams (50%)

-38%, technological obstacles

-25%, organizational culture

-23%, prioritization of the portfolio of initiatives (23%).

In response to such obstacles, 59% have a dedicated fintech or innovation team, and 37% even have a fund dedicated to investing in these types of companies.

Regarding investment or plans to invest in a fintech start-up or other companies

-37% already invest in fintech companies.

-33% do not currently invest

-30% plan to invest.

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(Featured image by 6689062 via Pixabay)

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First published in RealEstate Market&Lifestyle, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.

Anne Kings is a reporter for the financial sector, often tackling Wall Street and shareholders' interests. She also covers the intersection of media and technology, and delves into interesting topics on entertainment. Sometimes she also writes about the cannabis industry, in particular CBD and hemp. She is currently based in New York.