Traditional financial firms have expressed concern over their inability to adopt innovative processes and the growing popularity of fintech alternatives.
Less than three per cent of traditional financial firms believe that they are successfully embedding innovative practices into their business culture as fintechs continue to disrupt offerings, according to Capgemini.
Fintechs were now slightly ahead of the game, with 56.3 per cent trust rate ahead of traditional firms. According to the Capgemini World Fintech Report, 42.8 per cent of customers in Australia are now using at least one alternative financial service.
A lack of conducive culture for innovation was cited by 40 per cent of survey respondents as the biggest barrier to the development of processes and offerings to challenge fintechs. According to the report, however, 44 per cent of traditional firms were confident in their digital strategy, but struggled to implement innovation.
Traditional firms have managed to retain their lead on alternative disrupters, edging ahead globally in fraud protection measures, service quality and transparency, while fintech alternatives were cited as more efficient and better value for money.
Capgemini Australia industry practice leader for banking and capital markets, Philip Gomm, said that Australian firms were looking to counter the threat of disrupters by collaborating with fintech enablers.
“With local fintech organisations able to attract substantial private investment, we also see strong institutional appetite from banks looking to take equity in start-up fintech businesses,” he said.
“Successful fintech providers are thus positioning to supply transformational capabilities that empower traditional organisations to disrupt the disrupters.”
Capgemini said around 60 per cent of traditional firms now view start-ups as potential partners, but a close 59.2 per cent are also simultaneously developing in-house capabilities.