Singapore's financial services firms brace themselves for more fintech

23 February 2016

Survey reveals where Singapore CFOs expect new financial technologies (fintech) to have the biggest impact on their traditional business models

Fintech is shaking up the banking and financial services industry in a big way.  A wave of new start-ups and disruptive technologies are challenging the traditional business model by offering everything from peer-to-peer payments and loans to investment management and crowd funding.

According to a survey by recruitment firm Robert Half in Singapore, banking and financial services leaders know their businesses are under threat with many prepared to increase spending to counter fintech challengers.

The survey involved 400 senior financial services leaders in four countries – Singapore, Hong Kong, Japan and the United Kingdom.  One hundred of the respondents are from Singapore.

According to the survey, the biggest impact of fintech will come from online investments firms – a threat nominated by 40 per cents of respondents.  Concern about online investment firms among Singapore financial services leaders is well above the global average of 30 per cent.

The next biggest impact is expected to be from challenger banks (18 per cent) followed by peer-to-peer lenders (12 per cent).

Ms Stella Tang, Managing Director of Robert Half Singapore, said fintech firms aim to capture customers by offering a more intuitive way to access products and services. 

“The power of disruptive technology lies in owning the customer interface, not in owning assets.  A disruptive start-up company makes it easier for customers to access products and services that other companies own or produce.”

“The challenge to banks and financial institutions is to ensure they do not lose their customers to new firms offering easier, cheaper or more intuitive ways to compare and acquire the financial services they need.”

“Singapore banks and financial institutions are actively countering this threat by upgrading their own user interfaces and moving more of their interactions to mobile and digital.  That’s why banking professionals with experience in these new technologies are in high demand.”  

“While the disruptive challengers pose a threat to traditional banks and financial institutions, there is still a long way to go before they topple the established banking hierarchy in Singapore,” Ms Tang said.

Table 1: Which new entrant is likely to cause the most disruption to the traditional financial services sector over the next 12 months?

 

All

Singapore

Hong Kong

Japan

UK

Online investment firms

30%

40%

23%

30%

26%

Challenger banks

24%

18%

33%

20%

24%

Peer-to-peer lenders

15%

12%

13%

18%

16%

Online traders

12%

6%

11%

16%

13%

Mobile payments

7%

12%

7%

5%

4%

Non-traditional, new entrants

6%

7%

4%

6%

8%

Crowdfunding

5%

5%

4%

5%

6%

Digital currencies

1%

0%

4%

0%

3%

Other disruptive technologies

0%

0%

1%

0%

0%

 

The survey found mid-sized banks and financial institutions (those with between 250 and 499 employees) are more likely to be increasing investment in their own technologies to counter the threat of new entrants.

Fifty five per cent of mid-sized firms are increasing the amount they are spending in response to new technologies, compared to 42 per cent of small firms and just 35 per cent of large firms.

Table 2: What are your business' investment plans in the next 12 months for disruptive, innovative technology developments to compete with new entrants?

 

Total

Small

 

< 250 employees

Medium

 

250 to 499 employees

Large

 

>500 employees

Increase

44%

42%

55%

35%

No change

49%

52%

39%

56%

Decrease

7%

6%

6%

9%

 

The average increase in spending to counter new technologies is greater among Singapore banks compared to the other countries surveyed.  The average increase in spending across the four surveyed countries is 11.11 per cent, while for Singapore firms the average spending increase is 13.57 per cent.

Table 3: Average increase in spending to counter new technology entrants

COUNTRY

Average increase in spending (%)

All

11.11

Singapore

13.57

Hong Kong

8.08

Japan

10.18

UK

12.65

 

###

Contact us

MEDIA CONTACT

Gabrielle Nagy 
Public Relations Manager, Asia Pacific
P: +61 2 8028 7751
E: [email protected]

Share This Page