• Drivers of the Fintech Revolution
  • Why is the fintech revolution happening now?
  • 1. A Changing Economic/Regulatory Landscape
  • 2. A Rapidly Evolving Technology Environment
  • 3. Shifting Customer Expectations
  • Reference

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Drivers of the Fintech Revolution

Why is the fintech revolution happening now?

1. a changing macroeconomic and regulatory environment
2. the rapid evolution of technology
3. shifting customer expectations

• The three catalysts has forced incumbent financial institutions to re-evaluate the competitive threats they face.

1. A Changing Economic/Regulatory Landscape

After financial crisis in 2008, a number of economic and regulatory factors converged to facilitate the growth of fintech.

• Regulators increased the regulatory burden on financial institutions.

• Regulators also sought to encourage the emergence of nontraditional competition.

• Extremely law interest rates.

2. A Rapidly Evolving Technology Environment

Financial institutions were among some of the earliest private sector entities to make significant investments in information technology.

• They are deeply invested in inflexible systems that are often 40 or more years old.

• Legacy systems made it difficult for them to keep pace with the exciting new opportunities presented by the rapid evolution of technology.

3. Shifting Customer Expectations

While banks struggled to prioritize resources for innovation, nonfinancial digital offerings were changing rapidly.

• Technology companies conditioned consumers to expect digital services to be timely, personalized, and on-demand.

• Younger customers have proven to be particularly frustrated with the banking experiences offered by incumbents.

Reference

• The Future of Finance

  • The Impact of Fintech, AI, and Crypto on Financial Services, Henry Arslanian and Fabrice Fischer, 2019, Springer