Fintech
The future of fintech | KPMG perspectives
In a relatively short time, fintechs have become an established part of the financial services landscape. The rapid pace of innovation in the industry, combined with fintechs’ ability to understand customer wants and needs through data analytics, has resonated with consumers and businesses eager for customer-friendly products that speed up transactions and broaden the choice.
The future of fintech belongs to those organizations that can manage data from across the business, from front to back office, to guide their decision making. To do this, KPMG professionals believe that companies will have to become “connected enterprises”. These are organizations that use data and digital technology to run more smoothly, develop innovative products, connect with customers and suppliers, and provide employees with the tools to succeed. A clear focus on what they do best can help ensure technology investments are not too spread out, with increasing use of strategic partnerships to access new capabilities, accelerate expansion and help reduce costs.
“The rapid evolution of fintech poses challenges to traditional institutions, blurring boundaries and intensifying competition. Success relies on organizations skillfully using data to gain customer insights, prioritizing privacy and security, navigating regulatory frameworks, and seamlessly innovating,” said Jallain Marcel S. Manrique, head of technology consulting at KPMG in the Philippines.
Strategic imperatives
THE transformation of the fintech landscape is strongly influenced by consumer expectations for greater speed, security and trust, and by regulatory demands that require greater transparency, cybersecurity and data protection. As big tech, startups and traditional banks try to gain market share, a highly competitive ecosystem is emerging. We have identified the strategic imperatives needed to address both customer and compliance challenges – all requiring connected capabilities to develop, build and deliver seamless customer experiences.
Focus on core business identity
IMPROVE key skills to stay ahead of the curve in a competitive fintech arena. The fintech market is incredibly competitive, with an influx of new entrants from sectors such as social media and telecommunications offering payments and financial products.
To maintain an edge, fintech can look for new opportunities such as adjacent products and services. It is especially important that new products are aligned to your brand and core competencies and are not so resource intensive that they compromise the customer experience. When launching new products, operational functions such as finance, customer service and compliance should be linked to product management and engineering to maintain consumer protection, data security and regulatory compliance. An alternative route is to form strategic partnerships or acquisitions to accelerate speed to market.
Chart a path to profitability
NAIL’s fundamental unit economics amplifying profitability. Fintech companies often face a unique set of financial challenges as they navigate growth phases and progress through funding cycles. In the early stages, fintechs typically experience high customer acquisition costs fueled by concerted marketing efforts that support brand building and customer growth.
Maintain technological relevance and avoid technical debt
KEEP abreast of emerging technologies to avoid technical debt. To thrive in a highly dynamic and unstoppable industry, it is essential that fintechs maintain technological relevance: this gives them a competitive advantage, helps attract top talent, fosters a culture of innovation and forms strategic partnerships with other technology-focused companies .
Create strategic partnerships
ACCELERATE the expansion of customer reach through the large-scale delivery of new products and services. As fintechs continue to grow in size, scope and complexity, they must support large-scale product distribution, with adequate databases, invoicing and invoicing systems, customer support and supply chains increasingly powered by artificial intelligence or machine learning technologies. In many cases, the way forward is through partnerships: working with and managing a diverse partner ecosystem connected to customers, employees and business partners rather than building capabilities internally.
Harness the power of data to drive strategy
OPTIMIZE data insights to develop reliable products and exceed customer expectations. Having pioneered technology-enabled, convenient and easy-to-use financial products, fintechs must step up to meet increasingly demanding customer expectations. And they must do so by scaling from nimble startups to larger, increasingly regulated enterprises. Today’s users expect carefully customized products from the moment an app is downloaded through every stage of their experience.
As part of KPMG RG Manabat & Co.’s initiative to empower the digitally-enabled Philippines, the firm will hold its annual Innovation Summit at Shangri-La The Fort in Bonifacio Global City, Taguig, on July 4, 2024. The summit will bring together industry experts, business leaders from different sectors and the public, serving as a platform to share insights and strategies in the digital landscape. The finals of the Philippine leg of the Global Tech Innovator Competition will also be held during the Summit, providing a much-needed platform for local tech startups and tech players in the country to showcase their businesses to potential local and international investors.
Join virtually via Zoom by registering via this link: https://kpmg.com/ph/en/home/events/2024/07/innovation-summit-2024.html. Registrations are open until June 15th.
This excerpt was taken from the KPMG Thought Leadership publication: https://kpmg.com/xx/en/home/insights/2023/09/the-future-of-fintech.html.
© 2024 RG Manabat & Co., a Philippine Partnership, is a member firm of a global organization of independent member firms affiliated with KPMG Int’l Ltd. All rights reserved. This article is for general information purposes only and should not be considered professional advice on any specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent BusinessMirror, KPMG International or KPMG in the Philippines.