Commercial banks ‘to up FinTech investment’
Written by Chris Lemmon
More than three quarters of commercial banks are preparing to increase FinTech investment over the next three years, according to a new survey.
The study also revealed that 86 per cent of senior managers expect an imminent rise in investment, but seven in 10 respondents believe that the rise of technology within commercial banks threatens traditional one-to-one banking and customer relationships.
The in-depth research, commissioned by financial services technology firm Fraedom, analysed responses from 100 decision makers in commercial banks, including shareholders, middle managers and senior managers.
Despite a belief that the future of the FinTech sector is “exceptionally bright”, some 63 per cent of those canvassed felt that commercial banks were more cautious than retail banks when it came to adopting new technologies.
Furthermore, the most common reason given for commercial banks falling behind their retail counterparts was that “the market was settled and there was no strong competition from newcomers until now”. This was cited by 37 per cent of respondents who felt retail banks surpassed commercial banking in the uptake of technologies.
Kyle Ferguson, CEO of Fraedom, said: “The research reflects what is an upward curve for FinTech organisations, and to continue this trend it’s important for commercial banks to make the right choice when working with a FinTech provider.
“By working with a trusted partner that understands the challenges of local markets, and equally how digitisation of commercial banks can support financial service offerings, this choice can often lead to further investment in the FinTech industry.”