In its recently published Global FinTech Report 2017, PwC provides the results of a survey based on the responses of over 1,300 participants involved in the financial services industry from 71 countries and across six regions. Respondents included CEOs, directors, heads of department and other top management.
Key messages include:
- 88% of incumbents are increasingly concerned they are losing revenue to innovators
- 77% of financial institutions will increase internal efforts to innovate and 82% expect to increase FinTech partnerships in the next three to five years
- 77% expect to adopt blockchain in some way by 2020
- 54% of incumbents see data storage, privacy and protection as the main regulatory barrier to innovation
- 30% of large institutions are investing in artificial intelligence
Regarding blockchain, as the concepts become part of the strategy, more respondents have become familiar with it – with 24% very or extremely familiar versus 17% in 2016. North American participants are the most familiar with the technology. 55% of respondents are planning to adopt it as part of a production system or process by 2018, and 77% by 2020. The most likely business use cases of blockchain, as seen by 55% of respondents, is in Payments Infrastructure, followed by Fund Transfer Infrastructure (50%), and Digital Identity Management (46%).
According to the survey, consumer banking will continue to be the epicentre of disruption over the next five years, according to 80% of respondents. Most bankers see personal loans (64%) and personal finance (50%) most at risk in moving to a FinTech company. However, 63% of bankers see the rise of FinTech as an opportunity to expand products and services. In fact, bankers are increasingly turning to FinTech companies to engage in partnerships (54% in 2017 vs. 42% in 2016), and to buy the services of FinTech companies (40% vs 25%). Banks are focusing on the improvement of their operations through digital solutions and are looking to increase customer empowerment and/or control of financial matters.