Majority FIs fear threat to their businesses from FinTechs

Among India’s financial instituitions (FI), 67% consider non-traditional FinTech companies a threat to their businesses, with 95% of them expect to partner with FinTechs in fiscal year 2017-18 to boost innovation, according to a study.

“Consumers are increasingly getting attracted to non-traditional financial service providers, starting with payments and funds transfers. Personal finance and loans are the next avenues that are ripe for disruption in India,” the study titled ‘Redrawing the lines FinTech’s growing influence on financial services’ by PwC said.

The report also states that 84% of the respondents say that they are driving internal efforts to innovate through FinTech.

“A whopping 95% of incumbents in the financial services industry believe that the innovation they seek can be brought about by engaging in FinTech partnerships,” report says, adding, “The additional edge that innovative FinTechs, who are free from regulatory and legacy baggage, can provide through partnerships is something that incumbents are aggressively seeking to capture.”

The report further states that most traditional players expect some real returns from their FinTech expeditions. “Although the level of investment each one of them is willing to make varies greatly, on an average, they expect an RoI of around 29% on all of their FinTech investments,” it adds.