Professional Documents
Culture Documents
OF FINTECH
HOW FINTECH IS
TA K I N G O V E R T H E
W O R L D A N D W H AT
COMES NEXT
P R O V I D I N G I N - D E P T H I N S I G H T, D A T A , A N D A N A LY S I S
O F E V E R Y T H I N G D I G I TA L
Fintech is an umbrella term for technologies powering
innovation in financial services
Most fintech startups fall into one of these 8 categories:
It started in a few global tech and financial centers
Founded 2005
Founded 2006
Customers were unhappy with their banks
Percentage of US consumers with a great deal of trust in banks
25%
20%
15%
10%
5%
0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: Gallup
Startups developed technologies to serve unmet needs
Mint created a personal finance management dashboard
in 2006
Square launched a mobile point-of-sale terminal in 2009
1200
Volume of funding (Billions $) Number of deals $16.0
986 $14.0
1000
933
$12.0
800
769
818 $10.0
600
589 $8.0
$8.0 $4.0
200
$3.8 $2.0
$2.6
0 $-
Source: CB Insights
And fintech spread across the globe
Founded 2005
Founded 2008
Founded 2006
Founded 2009
Founded 2010
Some companies have achieved huge success
Global fintechs with the highest valuations (Billions $)
Lu.com $18.5
Stripe $9.2
One97 $7.0
SoFi $4.5
Greensky $3.6
Credit Karma $3.5
Oscar Health $2.7
Klarna $2.5
Mozido $2.4
Adyen $2.3
-£0.5 -£1.1
-£4.3 -£5.3
-£17.3
-£36.9
Incumbents and startups decided to try to work together
Percentage of FIs planning to increase fintech partnerships in the next 3-5 years
95%
89% 88%
82% 81% 81% 78%
72%
68%
16%
14%
Fintechs Incumbents
1. Legal
2. Solving a problem
3. Effectively implemented
So what does the future of fintech innovation look like?
True innovation is: Legal
Governments will
continue to make it
easier to innovate
by reducing
regulatory
hurdles
Financial services is an important sector to many governments
Financial services’ contribution to GDP in 2016
Differentiate 29%
77
69
61
24
18 18
76%
66% 63% 61%
54%
Explicit apologies
build positive brand
sentiment
Full explanation of
outage provided in
plain English
Lloyds Bank
shows
customers’
availability of
digital
services in real
time
Customers have a problem with “one-size-fits-all”
Global consumers that believe sharing data should result in personalized products
Insurance 64%
Banking 63%
Users aggregate
accounts and get
a holistic view of Users can find,
their finances and access,
products in-app
Customers have a problem with high fees
Reasons customers consider switching accounts
US Germany India
1.48%
0.85%
0.7%
0.35% 0.45%
0.3%
2016 2017
78% 73%
57% 54%
44% 39%
32% 33% 27% 22%
Engaging in Expanding existing Leveraging cloud Buying white labelled Acquiring fintech
partnerships partnerships technology and SaaS fintech products and companies
services
Source: MagnaCarta
Others will jointly create new solutions
Incumbents and startups will continue leveraging each others’
strengths
Strengths: Strengths:
• Brand • Agility
• Capital • Proven technology
• Customer base • Flexibility
These activities are creating clear value propositions for fintech,
driving investment
Global VC-backed fintech funding
1200 Volume of funding (Billions $) Number of deals $16.0
986 $14.0
1000
933
$12.0
769
818
800
$10.0
600
589 $8.0
$8.0 $4.0
200
$3.8 $2.0
$2.6
0 $-
20%
15%
10%
5%
0%
2010 2011 2012 2013 2014 2015 2016 2017 YTD
(Q2)
Source: KPMG
Let’s review
Governments will continue to remove regulatory
hurdles to create fertile ground for fintech to grow
Fintech will create attractive products that boost transparency,
personalization, and lower costs
While partnerships have been trying so far, startups and
incumbents will figure out how to work together effectively
“Fintech” will become synonymous with
“financial services” around the world