DECEMBER 2017CIOAPPLICATIONS.COM8anks are now seriously taking notice of Fintechs. The "Fintech" concept originates from the combination of finance and technology and is a novel phenomenon of business startups seeking to transform the financial industry. These could include solutions for payments, insurance, investments, accounting instruments and credit, among other services. Fintechs have come a long way as just a few years ago, by and large, they were brushed aside as a passing trend. With more than 10,000 estimated Fintechs in the world, catering to end consumer needs through their innovative offerings, relevance is getting stronger by the day.The looming debate is whether Fintechs will replace banks or will banks invest and takeover them. Though exceptions have emerged on both sides of the spectrum, truth is somewhere in between. Far from a "winner takes it all" scenario, future of the financial ecosystem will see Fintechs and banks retain their competitive advantages by acknowledging the value in harmonious coexistence. To understand where this convergence is likely to take place, it is imperative to understand their respective strengths and weaknesses. Both have something the other wants. Given that one's strength is the other's weakness, and vice-versa, it's only natural that smart banks and ambitious Fintechs look to leverage each other's competitive advantage to preserve their value within the chain.Personally, I believe there are distinct areas in which Fintechs and banks need to clearly establish their collaborative intent.1. Ability to be Agile vs Understanding of RegulationsBanks: Most banks are currently in the midst of a digital transformation (or at least thinking about it), looking for ways to speed their time to market and to deliver new value to customers. However, for most banks, their existing processes do not naturally extend to being agile and rapid. In this case, Fintechs are favorably looked upon to learn from and are being brought in to help banks adapt and deliver quicker working pilots to challenge the norms.Fintechs: For Fintechs, nothing is impossible, as they rapidly adopt new ways of design and delivery. They pilot fast to learn from customer feedback, iterate and improve the product instantly, almost overnight. However, their speed gets hampered by ignorance of banking regulations. As soon as the Fintech invention is tested in a bank's setting, regulatory requirements become the hindrance. Fintechs can benefit immensely if this know-how and guidance is shared with them beforehand. They need banking coaching ZUBAIR AHMED, SVP, HEAD OF IT & BUSINESS INNOVATION, EMIRATES ISLAMIC BANKBANKS AND FINTECHS ­ IS IT A MATCH MADE IN HEAVEN!Zubair AhmedIN MYVIEWB
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