Implementing FinTech solutions is a way to drive efficiencies and improve quality and consequently represents an opportunity for businesses, according to the findings of an EY survey: FinTech in the Channel Islands.
- 88% of respondents view FinTech innovations as an opportunity for their business
- However, 63% of respondents think that the current level of information in the FinTech market is not sufficient
- 62% of Channel Islands businesses surveyed have implemented at least one FinTech solution
- 61% of respondents would opt for an off-the-shelf solution or partner with a third party rather than develop one in-house
The survey, launched in June 2017, found that 84% of those surveyed across the Channel Islands are directly involved in decision making within their organisations.
EY wanted to understand the thoughts of local businesses and gauge how the financial services sector has been responding to the changing demands of its environment. The survey results were considered alongside market data gathered by EY during the summer of 2017.
88% of those who responded view FinTech as an opportunity for their organisations, with only 3% of respondents viewing it as a threat.
Respondents identified business efficiencies as the principal driver for using FinTech, with data integrity, transaction speed and security also highlighted as advantages of adopting innovative technological solutions.
Ove Svejstrup, Associate Partner in assurance at EY, said that these figures suggest a high level of awareness of FinTech in the islands, as well as a desire to roll out FinTech products.
“Awareness of FinTech is clearly high within the islands, as is the recognition of the benefits it can provide, but this alone is not enough. 63% of respondents said that the current level of information on the FinTech market is insufficient,” said Mr Svejstrup.
“With events such as FinVention taking place, there is already talk of FinTech in the market however the results suggest that more work needs to be done. Professional services firms and law firms should work with FinTechs to explore opportunities and look to educate the industry. The willingness to embrace the solutions on offer stands the islands in good stead in the global marketplace.”
Implementation of FinTech solutions has already begun in the Channel Islands and the current level of adoption among respondents is 62%. Although they should not be directly compared due to varying perspectives, this is an interesting statistic against the 33% global consumer adoption level revealed in the 2017 EY FinTech Adoption Index, and suggests that local businesses are in good stead.
Awareness of FinTech and acknowledgement that businesses need to react is high but concrete information and understanding of specific FinTech solutions is relatively low, resulting in a market with a large unexplored potential.
EY identified six main FinTech solutions – Alternative financing, Blockchain, InsurTech, PaymenTech, RegTech and Robo-Advice – and charted respondents’ levels of understanding of each of these on a scale of one (no understanding) to five (very good understanding). The highest-scoring solution was RegTech with an average response of 2.91 and respondents therefore displayed a below-average level of understanding.
This lack of understanding perhaps means that businesses would not currently have the in-house expertise to develop FinTech solutions; only 13% of respondents would opt to develop their own FinTech solutions in house.
The majority of those who completed the survey (61%) favour an off-the-shelf solution or partnering with a third party to develop products.
Mr Svejstrup said that the findings of the report suggest that broader discussion regarding the development of FinTech in the Channel Islands should continue.
“Our findings reflect considerable consumer appetite for new and innovative financial services products alongside a desire for more information and understanding about the specifics of these solutions.
“That leads us to conclude that it is the right time for Channel Island businesses to have a conversation about FinTech, how it can benefit them and how they can go about leveraging these innovations.”
A full copy of EY’s FinTech in the Channel Islands survey can be found here: http://bit.ly/2Dz3uWX