Having made their mark in relatively safe areas such as payments and P2P lending, fintech firms are now preparing to move into the middle and back office, giving them a multi-billion dollar opportunity to help reboot financial services, but only if they collaborate with the establishment, according to a new paper from Santander InnoVentures, Oliver Wyman and Anthemis Group.
The paper argues that the best way to face this oncoming change is for fintechs and established firms to work together. "This is the central premise of this report: that, to realise the opportunity of Fintech 2.0, banks and fintechs will need to collaborate, each providing the other with what it now lacks, be that data, brand, distribution or technical and regulatory expertise. Only by collaborating will the opportunity of Fintech 2.0 be realised."
Among the areas investigated are the applications for the Internet of Things, how to be smarter with data, and creating frictionless processes and products. Examples highlighted include the streamlining of processes surrounding the creation of $25 trillion of new mortgages issued annually across the globe, and addressing the estimated $4 billion lost through inefficiency in global collateral management within the asset leasing sector.
Mariano Belinky, managing principal, Santander InnoVentures, says: "Funds alone are not enough. To move to the next phase of evolution in financial services, banks need to invite fintechs to work within our industry, even inside our own businesses."
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