Although Irish financial services firms are concerned about the potential disruption from FinTech, they recognise the long-term potential of its influence is even greater. PwC Ireland's 2017 FinTech report, Redrawing the lines, showed clear signs that the financial services industry is being driven by an increasing appetite for partnerships.
The global report released in February drew on the insights and opinions of over 1,300 business leaders around the world, including Ireland. The Irish report focuses on the FinTech revolution in this country specifically and how the financial services industry is getting to grips with innovation.
Speaking at the launch of the report, PwC partner John Murphy said: "With new business models, the pace of change in financial services seems only to be increasing. In the future, customers will be forced to make financial decisions based on a combination of artificial intelligence, even greater automation, less human intervention and new payment options."
The majority of Irish financial services firms expect to lose up to 40% of revenues to FinTechs over the next three to five years. At the same time, Irish organisations (62%) are more inclined than global peers (56%) to put disruption at the heart of their business strategy.
Partnering with innovators is becoming more popular as financial institutions are attempting to keep ahead with effective growth strategies. And nearly three-quarters (71%) of Irish respondents expect to increase FinTech partnerships over the next five years.
PwC Advisory director Ronan Fitzpatrick said: "Partnering with innovators is a win-win and Irish financial firms see the potential. As a result, a mutual understanding is emerging between the two parties – FinTech startups often require the access to capital and customers provided by incumbents, and big financial services firms are starting to understand how FinTech could be the key to finally overcoming legacy technological and customer communications issues.
"We see the financial services industry now embracing FinTech to help drive change and innovation. Activity ranges from partnering with FinTechs start-ups, financing in-house incubators and deploying new solutions, to testing blockchain. Sustained focus on innovation is much needed and can only be a good thing for firms and their customers."
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