According to PwC, FinTech describes the evolving intersection of financial services and technology. It can refer to start-ups, tech companies, or even legacy companies. Although the line is beginning to blur between the two.
Research from Innovative Finance has indicated that the FinTech sector is due to expand by over 50 per cent over the next 12 years. It’s no surprise that they are eating up market share; 56 per cent of FinTech brands state that disruption is their key strategy and 80 per cent of established financial services providers see them as a risk. PwC reports that 88 per cent of financial institutions are becoming increasingly concerned they are losing money to the innovators in FinTech.
But why are they such a threat? A survey in America noted that 70 per cent of customers believe that FinTech brands are flexible and able to provide solutions using new technology that works to improve the customer experience.
FinTech firms take the advantage as they have the ability to access their customer data easily, in a Single Customer View, using it to make informed marketing and general business decisions. This allows them to leverage their data to take advantage of new platforms swiftly and easily. For many older, bigger institutions, they can be hampered by data that is scarcely available and when it is available, it is often already out of date. PwC agree, having found that 54 per cent of the large financial institutions see data storage, privacy, and protection as the main regulatory barrier to innovation.
Data driven marketing is the key to success in today’s marketing arena. Being able to bring together all of your customer data, from any source, into a single customer record is crucial in helping you drive personalised marketing communications. A Customer Data Platform would also put your customer data in your hands, rather than you having to request out of date data exports from other departments. This is what will give you the same advantage as the FinTechs.