FinTech and the future of financial services
Top FinTech leaders ‘cut through the fog’ and provide insight into how enterprise ‘culture’ in the established financial services sector is affecting the adoption of FinTech.
Swinburne’s Master of Financial Technologies has launched into the new year with a series of talks, bringing renowned FinTech leaders together to discuss, debate and provide insight into the Australian & Global FinTech ecosystem. Hosted by Dr. Dimitrios Salampasis (Course Director, Master of Financial Technology & FinTech Program Leader Swinburne), the talk is part of the Programme’s ‘Frontiers of FinTech’ unit and provides both students and industry members with the opportunity to hear industry leaders illuminate FinTech trends, challenges and developments.
What is FinTech?
FinTech (financial technology) is a movement seeking to create a new financial industry; one that seeks to “… bring transformative and disruptive innovation to services through the application of new and emerging technologies which address consumer needs through automation…”.
FinTech is built upon a distributed model which uses technology to develop new financial services and products that amplify customer centricity; bringing with it an entirely new logic that challenges the structure and purpose of business and provides new foundations for innovation and transformation.
The first ‘Frontiers of FinTech’ talk welcomed a panel of leaders from a diversity of industries, including: Banking, Technology, Consulting, Financial Regulation and the global FinTech Startup ecosystem.
Speakers included; Cameron Stewart (Manager Corporate Development, Bendigo and Adelaide Bank), Uli Klink (Managing Director Australia & NZ, Bluechain Pty Ltd), Trey Zagante (Founder and Managing Partner, Venturetec), Matt Leeburn (Chief Commercial Officer, Moula), Samuel Russell (Co-Founder and EVP Marketing and Product, Worbli), Jonathon Hatch (Senior Advisor Strategic Intelligence, ASIC Innovation Hub) and Lachlan Vogt (Manager, Financial Services Technology Advisory, Accenture).
As these industry leaders discussed and debated the future of FinTech financial services, the topic of ‘organisational culture’ and how it affects the adoption of innovative, data-driven technologies emerged.
The adoption of new FinTech within the established financial sector poses many challenges; the largest being mass cultural change.
A recent study by NVP, found that “…cultural issues relating to adaptability to change, pose the greatest challenge…” to data-driven transformation at the enterprise level. Trey Zagante (Founder and Managing Partner, Venturetec), highlighted culture as the biggest barrier to organisational change and “…can make or break technology and data-driven transformation…”.
Within the established financial services sector, resistance to change remains at the detriment of the financial services industry.
Uli Klink (Managing Director Australia & NZ, Bluechain Pty Ltd) links such resistance to the financial industry’s established culture of risk mitigation. By nature, large financial institutions are trained to see “…risks everywhere…”. As a result, they “…decide not to do things…”. Fundamentally, large financial service organisations are “…not willing to take the risks they need…” in order to drive change.
This mindset (resistance to change) not only slows the rate of mass adoption of fundamental data-drive technologies (such artificial intelligence and blockchain) but limits the trajectory of growth for many FinTech startups built on the foundation of these technologies.
Sammuel Russel (Co-Founder and EVP Marketing and Product, Worbli) defines ‘mass adoption’ at the enterprise level. Worbli’s mission is to develop the world’s most cost-effective and developer-friendly consumer and enterprise blockchain platform. When speaking about his vision, Russel highlighted that “…there are nuances of blockchain that can really benefit how organisations operate today…”. However, Russel predicts that artificial intelligence and blockchain will not become mainstays for established financial organisations for another 4-5 years; once again citing organisational culture as the biggest barrier to adoption.
However, from a regulatory perspective the conversation around ‘when’ mass adoption will occur is not a conversation of ‘culture’, but a conversation of ‘ethical engagement’.
Jonathon Hatch (Senior Advisor Strategic Intelligence, ASIC Innovation Hub) views education, namely “…the skill of engagement…”, as the most importantly factor in driving the mass adoption of FinTech within established organisations.
For FinTech startups, this means “…being able to engage with all types of people across the spectrum who are either fully informed and completely trust your business… to the people who are completely ill-informed, and need to be brought across what you’re doing with the confidence in the safeguards that your system has…”.