Case for financial services sector to draw from tech innovations

Woman designed at Apple laptop. Credit: Pexels

Traditional banks are laden with technological legacies preventing them from being nimble, consumer-focused service providers, said Maybank’s head of corporate development and innovation, Amran Hassan.

“We have limited channels bridging supply and demand, banking technology is not nimble enough, our customers are changing and wanting everything immediately and customised for their iPads instead of waiting for the branch to open at 9am…we are stuck with our legacy systems,” Hassan admitted.

Amran was addressing the World Capital Markets Symposium’s panel discussion Mastering Disruption: Reinventing Business, Winning Market Share – that explored the ways in which businesses, particularly financial service providers, can leverage on the new technological innovations.

The inability of banks to adjust to new technical realities, particularly those involving small and medium-sized enterprises (SMEs) and startup ventures, has led to opportunities for alternative financiers to emerge in the peer-to-peer (P2P) financial space. P2P lenders and equity crowdfunding platforms are examples of innovative solutions that have emerged to service the segment overlooked by larger banks and financial institutions (FIs).

“The investors that we deal with are no longer content with ultra-low yield [due to low interest rates],” said Leo Shimada, the co-founder and managing director of Singapore-based Crowdo, a P2P and crowdfunding provider.

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Shimada noted:“On the business side, SMEs, which account for so much of growth in ASEAN markets, are unhappy with always being told ‘no’ by traditional financing revenues so, there has been a build up of demand for alternative financing.”

He added, “When we activate in a market, we see our business grow overnight. This is the success that we enjoy because we are satisfying an unmet market demand.”

Banks, which lack the agility and must consider consider and adapt to different business and regulatory conditions, are also struggling to adapt to changing consumer needs, which have evolved into an on-demand model.

This was commented on by Azran Osman-Rani, the CEO of iflix Malaysia and former CEO of low-cost carrier (LCC) Airs Asia X, who observed: “The internet today empowers consumers to enjoy what they want, when they want, where they want. In the case of LCC, it allows us to cherry pick the services that we want for the best price. In the case of entertainment…it gives us the ability to deliver immediately.”

Christopher Brycki, the founder and CEO of Australian automated investment adviser Stockspot, commented that the experiences of other industries with adapting to and refining technological innovation, knowledge and processes has much to teach financial technologists and fintech innovators.

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