FinTech 

Adoption

At a Glance

FinTech Ecosystem in Australia

Our Analysis

What Is It
Threats

The FSB's  and BCBS' working definition for FinTech: 

“Technology-enabled financial innovation …that could result in new business models, applications, processes or products …with an associated material effect on financial markets, institutions and…services”.

For ADIs

  • Strategic and profitability risks

  • Cyber-risk

  • Higher operational risk – systemic & idiosyncratic

  • Outsourcing risk

  • Compliance risk, including failure to protect consumers and data protection regulation

  • Money laundering 

For ADI customers

  • Data privacy

  • Data security

  • Inappropriate marketing practices

  • Discontinuity of banking services

How we can help ADIs with

FinTech & RegTech adoption

Mirroring overseas trends, the FinTech and RegTech sector in Australia has been growing rapidly in recent years. The outlook for the sector remains positive – as most recently evidenced by the establishment of an “Australian Senate Select Committee on FinTech and RegTech” in September 2019.  


Gen Advisory’s view is that if managed appropriately, FinTech and RegTech can bring tremendous benefits to ADIs. We believe that ADIs which are able to implement FinTech and RegTech effectively will enjoy a competitive advantage over those which regard them as a mere compliance exercise.

The Future

The BCBS's assessment is that FinTech innovations could result in 5 possible banking scenarios: 

  1. “Better Bank”.

  2. “New Bank”

  3. “Distributed Bank”

  4. “Relegated Bank”

  5. “Disintermediated Bank:".

Gen Advisory has observed examples of all five scenarios occuring  within the Australian banking sector.

“The accelerating pace of change from regulatory and technological developments brings the unprecedented potential to transform retail banking.”

UK Financial Conduct Authority, “Strategic review: Retail banking business models final report”, December 2018.

Key Issues
Opportunities

The success or failure of an ADI’s  FinTech and RegTech adoption depends on the following factors: 

  • Customer-centricity.

  • Value proposition & strategy formulation.

  • Use cases.

  • Cyber-security and resilience.

  • Privacy policies.

  • Data analytics capabilities.

  • Collaboration and partnerships.

For ADIs

  • Improved and more efficient banking processes 

  • Innovative use of data for marketing and risk management purposes 

  • Potential positive impact on financial stability due to increased competition 

  • Regtech 

For ADI customers

  • Better and more tailored banking services 

  • Lower transaction costs and faster banking services

  • Financial inclusion

  • Provide strategic advice to ADI Boards on FinTech and RegTech opportunities and use cases.

  • Deliver bespoke research on a specific FinTech/RegTech-related area of interest.

  • Deliver bespoke training on the different types of FinTech and RegTech available.

  • Manage and implement, on the ADI's behalf, a end-to-end project on FinTech and RegTech adoption.

  • Conduct due diligence on prospective FinTech and RegTech providers.

Gen Advisory has in-depth insights into specialised areas.
Contact us about your specific needs.

Contact

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