Despite all the activities in digitalizing the financial industry, there still remains a technology gap.
According to recent Capgemini and Efman study 48% of GenY and Tech-Savvy customers are likely to switch banks this year because their banks don’t: (1) offer varied products and services (2) meet their needs or preferences (3) integrate well with other platforms and apps.
We often hear that technology does not scale fast enough or support product development neither is it agile or customer friendly enough. Let alone that it needs to comply with rules and regulations.
Democratising finance through technology
The traditional banks have been challenged in the ways they conduct business and waves of changes in banking and finance are underway. We believe technology will be a defining factor of who will succeed or not. But technology in itself is of little use. It is what the technology do for the end client that matters. This is why we talk about democratising finance. What do we mean by that? We want to facilitate, with technology, financial well-being for the many. Take for example credit scoring, which used to be and still is for many a tedious manual process gathering data, cross referencing, scanning and printing documents. Just administrating signatures is a pain. This is not good or convenient for the lender nor the borrower.
A recent burning example of how such manual process becomes impractical is in allocation of capital. Desperate SMEs struggling in the wake of COVID-19 crisis. All very well governments are putting rescue packages in place and central banks coming to the rescue but if there are no efficient way of distributing the money it will be of little use or a disaster creating new asset bubbles.
If we agree that capital markets are there to allocate capital efficiently there sure is more to do on technology. This is where incumbents meet FinTech.