The COO of UBS’ Wealth Management sector said recently that banks are now focusing on working with FinTech companies instead of regarding them as competition.
Speaking at a recent Economist’s Finance Disrupted event in London, Dirk Klee said to Business Insider that:
We are embracing fintechs and actually we believe that there is great innovation. We need to find very smart ways to partner up and improve our existing business model.
Since the financial crisis, a number of FinTech companies have sprung up around the world with the aim of tackling the financial industry. By doing so they are offering innovative digital tools for people interested in an alternative way of handling their finances.
Yet, while the UBS COO has stated that banks are interested in working with FinTech firms, a recent report found that European financial technology companies believe that big banks are lobbying to block change that could see FinTech firms access banks customer data.
However, Klee adds that banks don’t believe in tackling FinTechs, but think a collaboration between the two will help to complement both industries by bringing the best of the two together.
One example of a bank working with FinTech is Canada’s Bank of Nova Scotia. It announced earlier this month that it had opened a new financial technology space designed to develop blockchain and artificial intelligence. It hopes that by doing so it will push it ahead of competition in the industry.
Indonesia’s Bank Central Asia (BCA), the country’s largest private bank, revealed at the end of last month, that it had invested approximately $15 million in financial technology startups and companies. According to a BCA statement, the investments will directly benefit BCA and its financial services offerings in the country.
Furthermore, according to South Korea’s Bank of Korea, non-financial technology companies that have expertise in FinTech will play a significant role in shaping the country’s financial industry.
However, while FinTechs are realizing the benefits of working with banks, banks too are enjoying the positives of working with FinTechs, particularly when it comes to cybersecurity.
Last December, the Bank of England is reported to have recruited financial technology companies to help prevent cyberattacks targeting financial institutions after a survey found that cyber risks topped the list of financial service concerns.
And yet, while there are plenty of banks working with financial technology companies, there are some banks who believe greater regulatory oversight is needed within the sector.
Of course, one thing remains: both industries need each other to move forward. Banks need FinTech to stay relevant in the fast-paced technological world we live in and FinTechs need banks to help them become more mainstream.
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