Big tech to enter banking ‘within five years’
Written by Peter Walker
The giants of the tech sector will make platform model plays into financial services within the next five years, according to experts at London FinTech Week.
That specific prediction was made by Mia Iwama Hastings, head of business development at Priviti Group, but was backed by Elie Shuggi, global head of startup delivery at Aviva, who added: “The ball game’s about to change quite quickly and dramatically.”
On another panel Xero’s small business director Nicole Buisson told the audience not to underestimate the power of the so-called FAAMG BATs - Facebook, Apple, Amazon, Microsoft and Google in the US and Baidu, Alibaba and Tencent in China - which are worth $5 trillion, according to data compiled by Bank of America Merrill Lynch.
Tom Bull, director of FinTech strategy at EY, admitted that these are all huge appealing brands, which could attract widespread adoption with a financial services play, although he added that in the UK, existing banks have also built up a lot of trust in comparison to tech firms.
Thomson Reuters’ director of financial risk and innovation Geoffrey Horrell pointed out that Alipay and WeChat Pay have already gained huge adoption in China, “in the UK you’re statistically more likely to get divorced than you are to change your bank”.
He continued that “big banks have a huge amount to spend on innovation” - citing HSBC’s recent pledge to spend up to $17 billion on technology - but “that doesn’t mean there’s no room for FinTechs”.
Indeed, Buisson argued that FinTechs are adept at “finding niches”, meaning there will always be a role for such quick innovations. As Shuggi described it: “corporates have torque, startups have speed”.