The largest share of 2015 Asia-Pacific fintech investment deals were in payments (40 per cent) and lending (25 per cent), which have traditionally been the sole domain of banks.
“We are seeing the convergence of two trends: venture capitalists are clearly signaling fintech is a growth opportunity and simultaneously financial services companies are waking up to the vast opportunities created by the current wave of fintech,” said Jon Allaway, Senior Managing Director of Accenture’s Financial Services group in ASEAN and executive sponsor of the FinTech Innovation Lab Asia-Pacific.
“Financial services institutions are embracing cloud technology, mobile wallets and blockchain to fundamentally redefine their business and operational models. We are seeing this in the increased investments from banks in fintech venture capital funding, incubators and startups.”
Financial services firms are also now turning to fintech for help in streamlining operations, complying with changing regulations and new currencies.
Indeed, Accenture forecasts that blockchain, the underlying distributed ledger technology that supports the exchange of crypto currency and cryptographically secured financial assets, will increasingly be a focus for startups, banks and investors. As a stand-alone technology, blockchain could help banks, credit card companies and clearinghouses collaborate to create safer, faster accounting and optimize capital use by reducing counter-party risk and transaction latency.
Another fintech opportunity worth watching is the impact of cloud on this industry. As cloud adoption gains momentum, banks are beginning to identify which data can be hosted in the public cloud and which data should be maintained in a private cloud. Banks can satisfy regulators by keeping sensitive customer data more securely in a private cloud, while still taking advantage of the efficiency, flexibility, on-demand capabilities and lower costs cloud can offer. This creates opportunities for fintech startups to develop new services tailored around the cloud.
Accenture also expects investment in cyber security to increase significantly in the coming year, especially in light of recent large-scale data breaches reported.