25 November 2016
Prasad Padmanaban, Chief Executive Officer, Asian Institute of Chartered Bankers (AICB)
Sridharan (Sri) Nair, Managing Partner, PwC Malaysia
Overview of key findings:
Andrew Chan, Consulting Leader, PwC Malaysia
Angie Wong, Assurance Partner, PwC Malaysia
1. Amran Hassan, Head of Corporate Development & Innovation,
2. Andrew Chan, Consulting Leader, PwC Malaysia
3. Goh Ching Yin, Former Executive Director, Securities Commission
4. See Wai Hun, Founder & Chief Executive Officer, Juris Technologies
Is FinTech a threat or an opportunity of a lifetime? This was the question dominating discussions at the launch of ‘Catching the FinTech wave’, a survey on FinTech developments by PwC Malaysia and the Asian Institute of Chartered Bankers (AICB).
In helping Malaysian financial institutions (FIs) reimagine the future in FinTech, the survey captures the perspectives of FIs in banking, insurance and asset management, as well as FinTech companies.
For FIs, building talents with the right skills is key, beyond reassessing their business models to integrate FinTech, highlighted Prasad Padmanaban in his welcome speech.
Sri Nair, in his opening remarks, emphasised the importance of changing one’s mindset, understanding the thinking behind FinTech, how it impacts culture and what the market needs.
This provided some food for thought for the leaders of FIs and FinTech companies present at the launch.
Andrew Chan delved further into the report findings, emphasising the need for FIs to place FinTech at the heart of their strategy. Such a strategy though can’t be replicated in totality across the industry.
Even the forerunners in the industry (i.e. the likes of Bank of America, Citigroup and JPMorgan Chase), are different in their approaches. Some adopt a centralised approach under one Head of Technology. Others acquire FinTech companies, partner with new players, or set up in-house FinTech units.
A quick poll by moderator Angie Wong during the panel discussion, revealed that none of those in attendance were Chief Marketing Officers, Heads of Innovation or Technology Heads. An indication perhaps, that more needs to be done to move FinTech up the corporate agenda.
‘Could it be a case of Boards not being diverse enough?’, Andrew Chan reflected. Do they fully appreciate the intricacies of the technologies involved? A possible reason, perhaps for the disconnect between the Board’s understanding of customer needs and what customers really want.
A cumbersome compliance process could be the reason slowing down FinTech adoption, offered See Wai Hun of Juris Technologies, having worked with several major banks throughout her start-up journey. In one of her experiences dealing with a bank, she was told to expect 42 months for a FinTech idea to be approved, due to the siloed process and the many stakeholders involved.
Banks need to understand that a FinTech project may result in failure, said Amran Hassan of Maybank. The traditional way of viewing a new investment around the guaranteed success of a plan is no longer relevant. We need to learn the concept of piloting and prototyping, taking a leaf out of a start-up’s book.
Goh Ching Yin, who is currently a Maybank board member, reckons that the high percentage of Malaysian FIs fearing FinTech as a threat as observed in the survey, is not healthy, akin to a cardiac arrest. Like it or not, FinTech is here to stay, he notes.
Regulations need to keep up with the evolving developments, to protect the industry and help innovation thrive. In the words of former Hong Kong Central Banker, Tan Sri Andrew Sheng, central bankers are taking away your lunch, regulations are squeezing your lunch, FinTech is eating your lunch and some of you may still be at lunch. Such is the nature of the competitive landscape FIs are faced with.
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Guests mingling before the launch
Andrew Chan presenting the report findings
Prasad giving his welcome speech
The panel discussion
Sri giving his opening remarks
Prasad and Andrew at the press conference
Though financial institutions may have the best digital strategy in place to leverage on opportunities in the FinTech ecosystem, it’s important to note that if we lack the key enablers - the right culture, human capacity, expertise and skills to implement then our efforts will be in vain.
Perhaps the most important question FIs need to reflect on is, how can I earn stakeholder trust through FinTech? And by extension, how does this sustain my position in today’s crowded marketplace?
There is no one size fits all. It goes back to the culture of the organisation.
Banks are like planes. FinTech companies are like gliders.
For new FinTech contracts, it’s not possible to do competitive bids. There are no vendors we can use as a point of comparison in the marketplace
FinTech provides opportunities in allaying some of these pressures in the area of competition differentiation, cost reduction and improved customer retention. When you look at the strategic priorities amongst banks, where does FinTech fit in?