Fintech is shaking up the banking and financial services industry in Singapore in a big way.  A wave of new start-ups and disruptive technologies are challenging the traditional business model by offering everything from peer-to-peer payments and loans to investment management and crowd funding.

According to a survey by recruitment firm Robert Half in Singapore, banking and financial services leaders know their businesses are under threat with many prepared to increase spending to counter fintech challengers.

The survey involved 400 senior financial services leaders in four countries – Singapore, Hong Kong, Japan and the United Kingdom. One hundred of the respondents are from Singapore.

According to the survey, the biggest impact of Fintech will come from online investments firms – a threat nominated by 40 per cent of respondents. Concern about online investment firms among Singapore financial services leaders is well above the global average of 30 per cent.

The next biggest impact is expected to be from challenger banks (18 per cent) followed by peer-to-peer lenders (12 per cent).

Stella Tang, Managing Director of Robert Half Singapore, said Fintech firms aim to capture customers by offering a more intuitive way to access products and services.

“The power of disruptive technology lies in owning the customer interface, not in owning assets.  A disruptive start-up company makes it easier for customers to access products and services that other companies own or produce.”

See: Technology is on the Top of Mind for Singapore Employees. Is it for Better or for Worse?

The challenge for banks and financial institutions is to ensure they do not lose their customers to new firms offering easier, cheaper or more intuitive ways to compare and acquire the financial services they need.

“Singapore banks and financial institutions are actively countering this threat by upgrading their own user interfaces and moving more of their interactions to mobile and digital. That’s why banking professionals with experience in these new technologies are in high demand.”

“While the disruptive challengers pose a threat to traditional banks and financial institutions, there is still a long way to go before they topple the established banking hierarchy in Singapore,” Tang said.

The survey found mid-sized banks and financial institutions (those with between 250 and 499 employees) are more likely to be increasing investment in their own technologies to counter the threat of new entrants.

Fifty five per cent of mid-sized firms are increasing the amount they are spending in response to new technologies, compared to 42 per cent of small firms and just 35 per cent of large firms.

The average increase in spending to counter new technologies is greater among Singapore banks compared to the other countries surveyed.  The average increase in spending across the four surveyed countries is 11.11 per cent, while for Singapore firms the average spending increase is 13.57 per cent.

According to a new report by PowerwaterhouseCoopers (PwC) titled, “Blurred lines: How fintech is shaping financial services’, Big Four auditor PwC argues that traditional financial services companies are being challenged by new entrants that are leveraging technology to provide products and services that are more suitable for today’s consumers’ needs and habits.

The survey, which interviewed 544 top senior executives from the financial services industry and the fintech sector from 46 countries, found that respondents majorly believe that consumer banking and payments are the two sectors that are likely to be the most disrupted by 2020, FintechNews Singapore reports.

Fintech is disrupting the financial services industry with solutions that can better address customers’ needs by offering accessibility, convenience and tailored products.

Also read: Millennials in Singapore are Less Confident about Job Market Prospects in Q1 2016

News and Image credit: fintechnews.sg