Michael R. King is co-director, Scotiabank Digital Banking Lab at Ivey Business School, Western University
According to the search tool Factiva, the term “fintech” appeared close to 90,000 times in the global print media this year versus fewer than 300 in 2007, with many more references on social media. Its usage has actually declined since 2014, suggesting the fintech hype may have peaked.
Since many years, I enjoy working in the Financial Industry and future trends such as FinTech seemed obvious, until recently reflecting on possible trends for 2017. In my humble opinion FinTech is addressing a customer experience driven demand strongly supported by technical evolution such as mobile, cloud, big data, etc… Has the disintermediation of banks started?
In the fourth episode of our series on financial technology, we sat down with Anju Patwardhan, a Fulbright Fellow researching fintech at Stanford University who previously served as the Chief Innovation Officer for Standard Chartered Bank, one of the world’s largest and most international banks. Anju is currently researching the potential for financial technology to increase financial inclusion, particularly for small businesses, at Stanford University. She also serves as a Venture Partner for the Fintech Investment Fund of Creditease, one of China’s largest fintech firms.
My apartment sits a couple of stories above my local pub O’Reilly’s. It’s got a pretty sweet beer garden too. On the rare warm Summer nights, we get here in Dublin, I’ll open my window and my God, the noise. Different topics, different opinions, getting louder, more vociferous and more entrenched as the night goes on.
SMEs are no longer an afterthought for banks. They now represent a lucrative money-spinner, and we’re not talking about loans. We’re talking about digital tools that SMEs not only want, but are crying out and willing to pay for.
Banks are in an enviable position, as they have an unrivalled platform to offer SMEs what they want and to tap into a new revenue stream. But first, they must ask themselves these five vital questions.
1. “Do we really understand what SMEs want?”
2. “Are we ready to become an SME business partner?”
A key challenge faced by new and/or young businesses is access to affordable capital and business advice specifically designed for women, minority and immigrant business owners. In large part, this challenge exists because there has not been a systemic approach to connecting these entrepreneurs to scalable organizations like Accion, which has a 25-year track record of uniquely meeting their needs—and can do so across all 50 states. As a result, the match-making work happens in select geographies, which fragments the supply chain and creates sub-scale operations that don’t meet the full need
Perhaps no sector has more to gain from innovations in financial technology than small- and medium-sized enterprise (SME) finance, especially in Asia. SMEs accounted for 42 percent of Asia’s GDP in 2014 yet received only 18.7 percent of bank lending according to the Asian Development Bank.
Big data is changing everything from the way we shop to how we travel. Financial technology companies (fintechs) are now following in the footsteps of giants like Amazon, Airbnb and Uber to transform the banking industry in the digital age. Fintech solutions have shown particular promise across emerging markets where big data is used in advanced credit analytics to help determine a borrower’s creditworthiness based on non-traditional indicators like cell phone usage and social media activity.
As a result of the global financial crisis, funding conditions for SMEs in the peripheral European countries tightened considerably.
But following the implementation of expansionary monetary policies, including TLTROs and negative interest rates, has loan activity improved for small businesses in countries like Spain, where they are key drivers of growth and job creation? During the crisis, many Spanish SMEs were forced into liquidation, in part due to crippling lending rates.
“Fintech” – an intersection of financial services and technology – is taking the traditional financial world by storm. Indonesia is no exception, with a fast-evolving ecosystem that includes a host of financial services offered by new generation fintechs. Indonesia is the fourth largest mobile market in the world with 339.9 million connections – a SIM penetration of 131%!
