Asia’s Fintechs Will Change The Competitive Landscape in Bankingby Fintechnews Singapore December 13, 2018
Singapore’s fintech hub together with the emerging financial centers in China are a powerplay to become the world’s digital frontier in the financial services.
With the support of their governments, many fintechs are threatening traditional banks in the Western world. This will create a new competitive environment with winners and losers.
Why is that?
After the financial crisis, Western banks where paralysed with lawsuits, fines and regulatory requirements. The lack of innovation paved the way for a new industry (fintech), focusing on data and clients that lost trust in large banks and their intransparent and complex financial products.
Since everything is connected new market entrants outside financial services benefit from their agility and technological capabilities. They are able to converge e-commerce among other industries, utilizing social media and the network effects and hyperconnectivity to expand scale and scope to offer financial services. They have created a system that transcend organizational boundaries and performs without sector borders because all actors contribute to the value constellation of the ecosystem.
What about banking for the next generation?
In fact, ecosystems are the key to do business in the future and firms in Asia realised that as the first. China’s digital ecosystems are also on the rise because they have hundreds of millions of consumers to be used for machine learning. The more data can be fed to algorithms, the better and faster they learn about future consumer (investor) behaviour.
Alibaba, Tencent, Baidu and Rakuten have built up cross-sector ecosystems in less than a decade and act as vital incubators for innovation and growth. Alibaba with its affiliate Ant Financial has been increasingly penetrating consumption scenarios in daily life with more than 500 million clients, delivering a client experience from health to wealth.
The competitive landscape will inexorably change. Open Innovation Ecosystems shows you how to create new value constellations in the financial services. It prepares managers for a new era, where multi-industry ecosystems will prevail and touch every aspect of our lives.
Featured image credit: Freepik