Three-quarters (76%) of Irish financial services firms are concerned that part of their business is at risk of being lost to FinTech companies.
This is according to a new report from PwC, which draws on a survey of over 1,300 business leaders around the world, including Ireland. The report assesses the FinTech revolution and how the financial services industry is getting to grips with innovation.
It finds that the majority expect to lose up to 40% of revenues to FinTechs over the next three to five years. At the same time, Irish organisations (62%) are more inclined than global peers (56%) to put disruption at the heart of their business strategy.
Over three-quarters (79%) of Irish financial institutions expect to increase internal innovation efforts over the next three to five years and is slightly higher than global counterparts (Global: 77%). They are also likely to generate more ideas (72%) compared to global counterparts (61%).
However, less than half (46%) of Irish firms admit that they are good at commercialising these ideas. It is not surprising, therefore, that the expected annual return from FinTech related projects in Ireland is just 8% compared to 20% globally.
The report also shows that Irish firms view leveraging data analytics (54%) as a much greater opportunity relating to the rise of FinTech compared to global peers (46%). Aligned to this, data analytics (81%) is the most relevant technology for investment by Irish financial firms (Global: 74%). Investment in Artificial Intelligence (Ireland: 16%; Global: 34%) and the Internet of Things (Ireland: 7%; Global: 14%) is significantly behind global peers.
Nearly half (46%) see improving customer retention as an opportunity from FinTech compared to just 28% for global peers. And with more online purchasing, around half (49%) of Irish respondents plan to invest in mobile technology in the year ahead.
Commenting on the survey, Partner at PwC, John Murphy said, "With new business models, the pace of change in financial services seems only to be increasing. In the future, customers will be forced to make financial decisions based on a combination of artificial intelligence, even greater automation, less human intervention and new payment options. The survey confirms that FinTech in Ireland is having a growing influence on financial services and the long-term potential is even greater."
Source: www.businessworld.ie
