Open source software and cloud technology have lowered the barriers to entry for tech startups, leading the way for small innovative companies to make an impact. With the financial services industry facing such a wave of digital disruption, traditional businesses are being left for dust. In a post GFC marketplace, more consumers than ever are taking responsibility for learning about how their finances and investments are managed.
KPMG recently released this interesting report on the top 50 Fintech innovators globally, in which Xero features at number 10. Also detailing the sub-industry disruption, the report gives an insight into the innovation landscape. The companies listed are using technology to full advantage with game changing consequences. From peer-to-peer lending to investment social media platforms, Fintech firms have a number of advantages including no legacy IT systems or labour intensive business processes. Bringing cost efficiency, agility and usability to the table, many traditional business models are exploring partnership options with Fintech companies.
Banking industry disruption
Internet connectivity has also stretched the capabilities of more localised banking systems. Bitcoin and other Fintech startups have opened consumers to the possibility of a global currency. From Square to tech giants like Amazon and Google, a range of players are coming into the financial sector to help consumers manage payments and their day-to-day finances. There are many sectors of banking being disrupted by Fintech including wealth management, lending, digital identity, and “lifestyle banking”. Banks across the board are looking at co-creation partnerships as an innovation strategy; this article discusses the benefits such partnerships bring.
I see that in action here at our Christchurch, New Zealand base at the EPIC Innovation Hub - the BNZ Bank is a major sponsor of a range of innovative initiatives.
What are the implications for your business?
Change is accelerating. Individuals and business owners have sophisticated software tools at their fingertips with instant access to realtime data and analytics. Firms will have to be more creative in the services they offer; savvy small business owners will demand and expect more as the traditional “bread and butter” services for accounting firms become increasingly automated. We’ve observed an increasing demand for business advisory expertise and a move towards finance broking, wealth creation, and risk management.
Future proofing your business is essential and it’s important to be responsive to these changes. Education is the new marketing and the opportunities are limitless for those who are proactive.