A new report by business banking market research and analysis firm East & Partners suggests corporations aren’t opposed to changing banks as a direct result of new FinTech solutions businesses want to use.
Researchers announced East & Partners’ new report, “Financial Technology and the Corporate,” on Monday (Nov. 13). In a survey of corporate treasurers and CFOs at top corporations around the globe, 13 percent said they had already partially or totally switched their financial services provider to gain access to newly released FinTech tools. An additional 20 percent said they are considering doing the same.
“Although FinTech innovation has been the domain of the retail and consumer market, corporate treasurers and CFOs within the largest companies from around the world are rapidly expecting the same levels of sophistication and innovation from business banking products and services,” said Martin Smith, East & Partners’ head of markets and analysis. “Despite demonstrated growth of investment in digitization, traditional banks and financial service providers need to ensure it is being allocated into areas where institutional enterprises see the most need and value to their businesses, which currently sits predominantly within the risk and compliance space.”
“Fraud and Error Prevention” was cited as the top regulatory and compliance need among treasurers and CFOs surveyed, with more than 75 survey respondents highlighting regulatory technology (RegTech) solutions as being in-demand. Transaction reporting and anti-money laundering solutions also landed near the top of the list of priorities.
East & Partners found regional trends in corporate treasurers’ demand for FinTech solutions, too.
According to the report, Asian markets show the greatest readiness to switch banks, with China, Hong Kong and Singapore demonstrating the highest levels of current consideration for switching financial service providers, reports said. In fact, across China, Hong Kong, Singapore and the U.K., 90 percent of corporate treasurers said they expect FinTechs to take market share away from traditional banks. In Australia and the U.S., the figure was more like 50 percent.
“Global businesses are already engaging with best-of-breed FinTech solutions, whether they be from new entrants or banks that are developing internally, and are not shying away from switching providers to ensure they have access to these products and services,” continued Smith. “Although banks in Asia and the U.K. are most susceptible to FinTech competition, other markets cannot rest on their laurels, and ensure they keep developing both their digital offerings and their positioning to ward off the increasingly competitive market.”