This is what will hold back Traditional Firms from Riding a Fintech Boom

Two of our specialist fund managers focus on whether finance alone will benefit from the acceleration in technology.

Finance is obviously the key area in which fintech will boom, but how much crossover will there be into other industries as they adopt financial and technological innovation?

Having asked our leading fund managers whether Covid-19 has pushed the fintech agenda forward (“Can Covid-19 boost the fintech industry in 2020?” – 30/09/20), we now turn our attention to the potential winners and long-term lessons.

In this second instalment, our specialists were asked whether this will lead to more companies pivoting to improve their fintech capabilities. Will this solely be traditional financial companies but also other industries?

David Morris, Senior Asset Manager

We believe fintech trends such as digital payments, digital banking and financial software outsourcing were already underway. Covid-19 has only accelerated these trends. Looking at banks, for example, holding onto legacy systems can lead to higher operating costs, higher operational risks and poor consumer experience.

Banks must ramp up their technology platform not only to meet the demand s of tech-driven consumers, but also to stand out amid a growing competitive landscape. If superior technology was already critical for banks, the impact of Covid-19 has only increased this need.

James Grant, Senior Wealth Manager

Innovative fintech companies that are able to offer the best digital experience to their customers offer exciting investment prospects and should be a net beneficiary of the Covid-19 pandemic. They will exit this crisis in a stronger competitive position compared to financially weaker and digitally less advanced competitors.

In the digital banking space, short-term profitability will be under pressure due to the overall economic impact of the crisis. This crisis plays to their strengths, highlighting their ability to offer customers a seamless digital banking experience during the lockdowns.

During such stressful times, offering full, unrestricted access to one’s investments is of great importance, as is the ability to dialogue with knowledgeable financial advisors. Customers of IWL Consulting have been fully able to discuss with their advisors remotely, to change their investment strategy, to negotiate and sign new contracts digitally, and so on.

In the digital insurance space, longer-term trends are highly supportive. For example, all surveys point to much stronger demand for health and protection insurance as a result of the Covid-19 crisis, particularly in Asia. Given the ongoing physical constraints still facing many economies, those companies that are most digitally advanced are best placed to win highly profitable market share.

IWL Consulting, Asia Square Tower 2, 12 Marina View, Singapore 018961. Please call us on +65 3163 1538 or email us at [email protected] for any further information. Visit our website at

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