The perspectives of the banks. In June of 2015, The Economist Intelligence Unit (sponsored by HP) conducted in-depth surveys of over 100 global bankers and Fintech executives on the future of retail banking. This is what we found.

1. Fintech is serious, well-funded,
and coming fast
-target for venture
capital in 2014.
• Targeting all
banking products
• Expected to
gain traction in
3-4 years
$25 billion in investment
Where banks are weak – tech expertise, capacity to
innovate, agility and speed – Fintech is strong.
And conversely, where banks are strong, Fintech is
relatively weak.
$12.1
$4.0
$2.5$2.2$1.8
2009 2010 2011 2012 2013 2014
$1.9
Banks and Fintech: Complement each other in their
strengths and weaknesses
There is acceptance on both sides that the best route forward is not
head-to-head competition – but instead partnership and collaboration.
Banks who would partner/acquire Fintech 45%
53%Fintech executives who believe banks should partner or acquire
The perspective of the banks
Disruption in the
banking industry
In June of 2015, The Economist Intelligence Unit (sponsored by HP)
conducted in-depth surveys of over 100 global bankers and Fintech
executives on the future of retail banking. This is what we found.
Fintech threatens to disrupt the entire industry –
how will banking be transformed?
75%
80%
81%
79%
70%
79% 80%
Culture not suited to rapid change
Agility and speed to market
Inability to recruit/retain technology talent
Technological expertise
Unwillingness to cannibalise products
Able to improve current products
Absence of legacy software/systems
Lack clear strategic vision
Capacity to innovate
Under regulatory pressure
Less regulatory pressure
Constrained by legacy technology 78%
77%
66%
76%
75%
70%
83%
66%
81%
82%
80% 80%
Full line of banking products
Limited line of products
Deep financial pockets
Lack of investment capital
Effective risk management programs
Lack of experience in risk management
Existing customer base
Lack of customer trust
Reputation for trust and stability
Inexperience with regulation
Experience with regulators
Need to build customer base
Where banks believe they are strong Where Fintech believes it is weak
Where banks believe they are weak Where Fintech believes it is strong
79%
80%
74%
79%
75%
2013 to 2014
Venture funding
300%
Banks need to partner with Fintech to rapidly adopt
new technology-driven business models. Fintech needs
banks to achieve scale, meet regulatory standards,
and build their brands.
Why are banks finding it difficult to meet the
Fintech challenge?
Banking culture – risk averse
culture makes it difficult to
develop and execute vision
Concerns about security risks
Unable to attract
the right people
Lack of agility. Slow to market
Banks are not going to be Ubered or Amazoned. Instead,
their path will be to combine forces with Fintech through
acquisitions or partnerships. Some thoughts on
“Fintegration”:
Include IT in due diligence
and integration planning
Ring fence the new culture
Make regulatory
integration an early priority
Make data security an
early priority
Data integration
Integration of enterprise
infrastructures
Combining a bank and Fintech is at its heart combining two
technologies - start early with a tech-driven roadmap to the end state.
Keep the innovation of Fintech alive within a risk-conscious
banking environment.
The exception is regulation – it is mandatory to bring the acquired
entity under the bank’s regulatory standards and systems.
Security is top-of-mind for both parties, and for good reason. Bring the
combined entity up to the higher security standard of the two.
Create a data integration plan, with early priority on creating one
customer. Flexible cloud systems should help.
Once these priorities have been met, the process of integrating the
two infrastructures – data centers, data networks, network and
application architecture, etc – begins.
1
2
3
4
5
6
And bankers say they are
taking it seriously
19 out of 20 bankers believe
Fintech will become serious
competitors and take
market share in the
banking business.
Fintech is overstated
95%
5%
But the majority of bankers
acknowledge they are not
meeting the challenge
of bankers say
their industry is
ignoring the
problem
Meeting the
challenge
54%44%
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