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The report, FinTech – transforming finance, finds that while FinTech’s impact on finance and banking is proving to be as revolutionary to the sector as the internet has been for other areas of the economy, the rapid growth of such firms in the face of traditional regulatory models could increasingly become a barrier to success.
Faye Chua, head of business insights at ACCA, thinks that the rise of FinTech is good news for industry innovation and consumer choice;
‘While the scale of transformation is hard to predict, there is no doubt that the impact of FinTech across the traditional functions of finance has been significant. Major banking institutions are already responding through large-scale research and investment in the face of competition from start-up challengers. This is good news for consumers and firms, as the explosion of choice in a traditionally conservative industry offers a range of new possibilities of doing business based around their bespoke needs.’
Yet Faye Chua argues that the regulatory challenges posed by the speed of innovation places tough demands on governments and business alike;
‘Despite the US benefitting from a head-start thanks to Silicon Valley’s global standing as an innovation centre, progress has been slowed through legislative and licensing hold-ups. This has really opened the door for other markets, such as the UK and across Asia-Pacific, where a combination of supportive regulatory framework and high digital capability is allowing the sector to flourish.
‘Yet while FinTech opens a range of possibilities for business, from new banks to streamlining payments and lending, exploiting these opportunities will require adaptation from firms as well. We are already seeing a burgeoning ‘RegTech’ (Regulation Technology) sector which can use automation and data-analysis to provide intelligent, low-cost solutions to streamline this process. Understanding the intricacies of global best practices and adapting them for varying national contexts can set aspiring FinTech hubs on a course for success.’