PwC: ‘Fintech and Financial Services are competing less and coming together’

PwC succinctly sums up the rationale for deals like this, saying: “Fintech startups don’t just need capital, they need customers. At the same time, incumbents need new approaches to drive change and deliver innovation.”

Fintech startups are fast realising that it takes a huge amount of money and effort to attract a customer base that stretches beyond early adopters and the tech-savvy. Partnering with a large incumbent who will pitch them to their client base seems like a sensible growth hack.

Established finance companies, meanwhile, are struggling to innovate at the pace and to the standard demanded by clients. They are simply too big and cumbersome to deliver new digital products. Partnering with a nimble startup can fix this, allowing the incumbent to offer a slick service to clients with their brand on.

Steve Davies, PwC’s EMEA fintech leader, says partnerships also help large corporates transform their ways of working, helping set them up for a nimble future.

Davis says in an emailed statement: “Fintech collaboration, and innovation more widely, is not about jumping on the latest bandwagon — it’s about finding the best, most efficient way to deliver your business strategy and ultimately better serve your customers.

“Embracing fintech is as much about different ways of working and problem-solving as it is about deploying new technology.”

PwC’s survey also found:

• 88% of incumbents are worried they’re are losing revenue to fintech startups;
• 77% plan to increase internal innovation;
• 30% are investing in artificial intelligence;
• 77% expect to adopt blockchain technology in some form or another by 2020.