HSBC’s head of retail banking and wealth management, John Flint, has said mutual respect now exists between financial technology (fintech) companies and banks, with more collaboration expected.
He is reported as suggesting that this mutual respect is a marked change from the past. At the Davos for the World Economic Forum in 2011, Flint told the audience that fintech entrepreneurs had been struck as hostile and dismissive toward established banks. According to him, this had since changed.
“There’s mutual respect on both sides. If you look at smaller fintech firms, you can see that banks are partnering with them and that benefits both stakeholders’ needs,” he said.
Flint used HSBC’s relationship with Apple, through Apple Pay, as an example. “They’ve provided a technology platform and payment experience which our customers want. They extract a rent from us, but we can do more business,” he said.
Flint also said the established banks have been late to the financial technology revolution, but this is partly due to the financial crisis 2008, which put bank investments on hold.
“It feels like our industry has woken up to the possibilities of technology in the past three or four years,” he said.
“If there hadn’t been a crisis, I’m sure we would all have started thinking about it earlier.”
Banks are being warned to catch up quickly. For example, a recent study by the Strathclyde Business School said the traditional financial services sector in Scotland could lose 14,000 jobs and £635m in wages if organisations do not speed up the adoption of the latest financial services technology.
The findings of the recent EY study of more than 10,000 digitally active consumers found that around 3,000 had used fintech. Among the fintech users, a total of 25.2% of 25 to 34 year olds used two or more fintech services, with the figure expected to reach 47.8% in the foreseeable future, said EY.