Banking ‘due for disruption': fintech start-ups call for change at Rise Hong Kong conference
Players in the traditional banking and finance sectors must heed customer demand for innovation or run the risk of being sidelined, fintech start-up founders said at a Hong Kong tech conference on Friday.
Mobile payments, international transfers and e-commerce solutions are all areas where start-ups are gaining market share at the expense of more traditional companies.
Global investment in fintech grew by over 200 per cent between 2013 and 2014, reaching more than US$12 billion last year, according to market analysis firm CB Insights.
"In the next three to five years there will be more change in finance and the way you use your money than in the last 20 years," John Lunn, PayPal’s global director for developer and start-up relations, said at Rise 2015.
Wayne Benson, business development director of remittance service TransferTo, warned that if banks do not innovate in areas of high customer demand, they could be secluded from growing markets.
Customer experience is key, said Lunn, adding that moving money is a "clear pain point" at present, and ripe for improvement.
Brett Meyers, co-founder of peer-to-peer money transfer service CurrencyFair, said his company is able to undercut bank fees significantly by avoiding the international Swift payment processing system.
CurrencyFair maintains accounts in all of its markets, meaning that when a customer in Australia wants to exchange money with someone in Ireland, for example, the sum is paid into and out of local bank accounts at both ends, avoiding lengthy delays and reducing overheads.
Meyers said that fintech innovation can help banking customers effectively take charge of their own finances.
"Why shouldn't you feel empowered and have control over your own money?"
Egidio Zarrella, clients and innovation partner at KPMG China, was bullish about banks’ ability to adapt.
"Financial institutions will still be around [in five years]. They will adapt," he said.
"But they're not going to be running their business model as they are today."