The evolving fintech landscape brings both customer and compliance challenges, emphasizing the need for connected capabilities.
Fintech's growth demands connected capabilities for customer and compliance challenges.
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Article Posted date12 May 2024
5 min read
As featured on BusinessMirror: The Future of Fintech
The Future of Fintech
In a relatively short time, fintechs have become an established part of the financial services environment. The fast pace of innovation within the sector, allied with fintechs’ ability to understand customers’ wants and needs through data analytics, has resonated with consumers and businesses eager for customer-friendly products that speed up transactions and widen choice.
The future of fintech belongs to those organizations that can master data from across the enterprise—front to back office—to drive their decision-making. To do this, KPMG professionals believe companies will need to become “connected enterprises.” These are organizations that use data and digital technology to function more smoothly, develop innovative products, connect with customers and suppliers, and give employees the tools to succeed. A clear focus on what they do best can help ensure that technology investment is not spread too thinly, with a growing use of strategic partnerships to access new capabilities, accelerate expansion and help to reduce costs.
The rapid evolution of fintech poses challenges to traditional institutions, blurring boundaries and heightening competition. Success relies on organizations adeptly utilizing data for customer insights, prioritizing privacy and security, navigating regulatory frameworks and innovating seamlessly.
Jallain Marcel S. Manrique
Technology Consulting Head
KPMG in the Philippines
Strategic imperatives
The transformation of fintech landscape is being strongly influenced by consumers’ expectations for improved speed, security and trust, and by regulatory demands that require more transparency, cybersecurity and data protection. As big tech, startups, and traditional banks seek to gain market share, a highly competitive ecosystem is emerging. We have identified strategic imperatives that are needed to address both customer and compliance challenges— all require connected capabilities to develop, build and deliver seamless customer experiences.
Focus on core business identity
Enhance core competencies to stay ahead of the pack in a competitive fintech arena. The fintech market is incredible competitive, with a stream of new entrants from sectors like social media and telecommunications offering payments and financing products.
To maintain an edge, fintech may seek new opportunities like adjacent products and services. It is especially important that new products are aligned with the brand and core competencies, and do not stretch resources to the extent that the customer experience is compromised. When launching new products, operational functions like finance, customer support and compliance should be connected 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.
Carve a path to profitability
Nail fundamental unit economics while amplifying profitability. Fintech companies often face a unique set of financial challenges as they navigate through growth phases and proceed through rounds of funding. In the early stages, fintechs typically experience high customer acquisition costs fueled by concerted marketing efforts that support brand building and customer growth.
Maintain technology relevance and avoid technical debt
Keep pace with emerging technologies to avoid technical debt. To thrive in a highly dynamic and relentless industry, it is essential for fintechs to maintain technological relevance— it gives them a competitive advantage, helps attract top talent, fosters a culture of innovation and forges strategic partnerships with other technology driven-companies.
Create strategic partnerships
Accelerate expansion of customer reach through large-scale delivery of new products and services. As fintechs continue to grow in size, scope and complexity, they need to support large-scale delivery of products, with appropriate databases, billing and invoicing systems, customer support and supply chain increasingly powered by artificial intelligence or machine learning technologies. In many cases, the way forward is via partnerships— working with and managing a diverse partner ecosystem that is connected with customers, employees and business partners rather than building capabilities in-house.
Harness the power of data to drive strategy
Optimize data insights to develop trusted products and exceed customer expectations. Having pioneered technology-driven, convenient and easy-to-use financial products, fintechs need to step up to satisfy ever more demanding customer expectations. And they must do so while adapting from being agile startups to larger, increasingly regulated enterprises. Today’s users expect carefully tailored products from the moment an app is downloaded through every stage of their experience.
As part of KPMG R.G. Manabat & Co.’s initiative to empower a digitally-enabled Philippines, the firm will hold its annual Innovation Summit at Shangri-La The Fort in Bonifacio Global City, Taguig on 4 July 2024. The Summit will gather industry experts, business leaders from different sectors and the public, serving as a platform for sharing 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 technology players in the country to present their businesses to potential local and international investors through.
Join virtually via Zoom by registering through this link:
https://kpmg.com/ph/en/home/events/2024/07/innovation-summit-2024.html
Registration is open until 15 June 2024.
This excerpt was taken from the KPMGThought Leadership publication:https://kpmg.com/xx/en/home/insights/2023/09/the-future-of-fintech.html
© 2024 R.G. Manabat & Co., a Philippine partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more information, you may reach out through[email protected], social media or visitwww.home.kpmg/ph.
This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent KPMG International or KPMG in the Philippines.
