According to a recently released white paper by DLA Piper, Financial Services organizations reported that 52 per cent engaged with FinTechs in the last two years (2016-2018) and further 81 per cent are planning to engage with FinTechs in the next two years (2018-2020).
The white paper further notes that FSIs are focusing on the innovation gap, where the pace of change in technology is outstripping their ability to innovate and keep up with changing consumer behaviors and market demands.
"There is so much tech-enabled innovation going on within our own business areas, but it just isn't practical for us to try to cover everything ourselves, "explains Charlotte Wood, head of innovation and fintech alliances at Schroders. "There are obviously startups that are developing focused solutions to specific problems, and it makes sense to partner with them."
While DLA Piper's findings are based more on the global perspective, closer to home FSIs and Fintechs are finding ways to work together this was most evident during the premier CIO Fintech Summit themed, Collaboration and Co-Innovation in the Financial Services Industry, the summit brought together the Fintech industry players, policymakers, innovators, investors and regulatory authorities with the aim of fostering partnerships.
"The summit was a big win for delegates considering that Kenya has become a reference of the financial services industry since the country took a deliberate leap in digitising processes, securing critical assets and analysing data that's helping organizations to make tactical decisions to better both public and business enterprises," said Laura Chite, CEO, CIO East Africa.
"The financial services industry is banking on digital transformation to interact with consumers in new and exciting ways; empower professionals with new insights and tools; help businesses operate more efficiently; and open new opportunities never thought possible," said Harry Hare, Chairman CIO East Africa, while calling on all CIOs and IT line managers to secure their space at the summit.
Against this background, we take in account the instrumental role played by varied industry players to regulate the ICT industry as the country continues to steadily move towards digitised transactions.
In financial services arena, technology continues to serve not only as an enabler but a catalyst for modernisation said Laura adding that for one to marrying fresh tools with decades-old processes has proven disruptive especially among the FSIs in the Banking, SACCOs, Telcos and Insurance establishments.
Processes that were once completed over days are now executed on-the-go, but the critical mass is yet to access the full benefits of this disrupted market.
Synergy and coordination
The commitment to be part of next-level fintech journey, which promises to offer the synergy needed for coordination between deployment of smart capital, rollout of smart technologies and communication across the ecosystem ranging from policy makers, bankers, SACCOs, Insurers is encouraging, added Chite.
Dr. Bitange Ndemo, Chairman Blochain & AI Taskforce, Kenya, noted that technology has come a long way in the last few decades and has now stormed into the world of finance with a loud message of transformation. As such, he noted that fintech is an incredibly important topic for businesses not only in Kenya but worldwide, as it is changing the way they operate and, in many cases, making business operations cheaper.
"While there is no doubt that digitisation has over the last few years caused the banking, insurers and SACCO establishments to adjust their approach to deliver optimised services to customers, there is more for them to do to cope with the trends of fast evolving market," said Ndemo.
"SMEs can particularly benefit from various fintech developments, as they are the most at risk from funding issues and expenses," asserted Dr. Ndemo stressing that times are long gone for any business to survive if they are still invoicing clients then sit back for a lengthy wait of between 30-120 days before receiving payment.
Loans should be given instantly and technology is facilitating that process. It can be incredibly frustrating for SMEs, who need cash to keep business operations flowing if major industry players do not make their operations seamless.
"While there is no doubt that digitisation has over the last few years caused the banking, insurers and SACCO establishments to adjust their approach to deliver optimised services to customers, there is more for them to do to cope with the trends of fast evolving market," said Dr. Ndemo who is expected to speak at the Fintech Summit.
Today, despite the increased use of mobile and deliberate rollout of financial technologies, there are still millions of 'mama mbogas' (women selling groceries) and hundreds of thousands transport industry, popularly referred to as matatu in Kenya locked out of the progressive cashless transaction equation.
This year's East Africa Fintech Summit will be held under the theme, Collaboration & Innovation in the Financial Services Industry. The topic of collaboration will be conveyed by Dr. Patrick Njoroge, Governor, Central Bank of Kenya, who will be giving a keynote under the topic, "OPPORTUNITIES TO INNOVATE THROUGH COLLABORATION". The East Africa Fintech Summit will be held from the 22nd- 23rd of May 2019, click here to register for the event and learn more about Fintech.