Post on 01-Jun-2020
Will FinTechs replace traditional banks and insurance companies ? A KPMG Perspective
June, 2016
2 ©2016 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Document Classification: KPMG Public
What is Fintech
A contraction of the words ‘Financial’
and ‘Technology’, innovation in financial
services, whether that means new
products from new startups, or the
adoption of new approaches by existing
players where technology is the key
enabler.
Source: NDRC
3 ©2016 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Document Classification: KPMG Public
Technology driven innovation
– 10.000 + Fintech companies
– $19.1 billion in 2015
– Insurtech is lagging behind, but growing at a pace
– Regtech is very promising ($ 100 billion market?)
Banktech Insurtech Regtech
Fintech
4 ©2016 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Document Classification: KPMG Public
The Latest News – Funding to VC-backed Fintech
companies increasing once more to
5B $ in 16Q1
– Big Deals in China dominating the
fintech space
– European fintechs – slowly taking
speed, except for the UK
– Decreased focus on Payments
– Increasing interest in Insurtech
- Open Access (PSDII)
- Internet of things
- Global Platforms
- Age of the digital customer
- Artificial intelligence
& robots
- Social & Mobile
- Cyber security and Data Privacy
- …
Fintechs are surfing on the technological wave
6 ©2016 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Document Classification: KPMG Public
Fintechs also face many challenges
- Start up growth pains
- Limited access to customer
- No global or captive platforms
- Wonga in trouble?
- Venture Capital Fluctuations
- Regulation
- No established brands
7 ©2016 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Document Classification: KPMG Public
Disruptors vs Enablers
Funding in 2015* *‘Fintech 100’ - KPMG
Disruptors Enablers
8 ©2016 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Document Classification: KPMG Public
Insurtech
– Insurtech will impact all insurance
products by introducing new technologies
throughout the whole value chain.
– Most Insurtech are active in distribution,
followed by underwriting.
– A striking majority of the Insurtech are
enablers.
– In particular distribution, underwriting,
claims, risk and investment
management.
Car
Life/Home
Health
*Commerzventure
Enterprise
9 ©2016 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Document Classification: KPMG Public
What are financial incumbents doing? Leveraging Fintechs to accelerate innovation
10 ©2016 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Document Classification: KPMG Public
Platforms are the new dominant business model
– Captive platforms are asset light and
data heavy
– They become the default destination for
customers
11 ©2016 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Document Classification: KPMG Public
How does this apply to the financial sector? A financial Platform as default destination (1/2)?
Platforms as opportunity for
Fintech
The global platforms enable Fintechs
by reducing the cost and complexity
to deliver financial services.
(access to cloud, app stores, mobile
devices, KYC, etc.)
Service Unbundling
Specialized (one service) Fintechs
thrive within these eco-systems. Often
starting as a mobile application and
slowly unbundling the bank/insurer.
1 2
12 ©2016 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Document Classification: KPMG Public
The financial platform:
– Becomes a default
destination for customers
– Core banking capabilities
will be central
– Combined with a
marketplace for financial
services
How does this apply to the financial Sector? A financial Platform as default destination (2/2)?
3
Source: Philippe Gelis
13 ©2016 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Document Classification: KPMG Public
– Altogether Fintechs pose
more opportunity than
threat
– Key enabler for F.S. digital
(R)evolution
….
– But what if the Block chain
delivers on its promise or a
global platform emerges?
Opportunity or Threat?