The Fintech sector has experienced a period of rapid growth over the past year. As noted by the World Bank, with the exception of lending, digital financial services grew across the board, particularly in emerging markets. According to the report, Fintech is seen as the pathway to affordable financial services, which is critical for both poverty reduction and economic growth. And, at a time when face-to-face and physical interactions are seen as having risk, consumers are flocking to digital banking services to transact.
In addition to the growth in user numbers, there has been a rapid expansion in the number of Fintech services, with the World Bank finding around 60% reported launching new products and value-adding services.
For CIOs and other IT leaders, this rapid expansion in both the use of services and the need to develop and launch new digital services is placing pressure on them in a number of areas, including:
- Innovation: Fintech is in a “disrupt or be disrupted” situation, and CIOs need to be able to develop and roll out products quickly.
- Transformation: Having the platform for the kind of innovation demanded in Fintech requires transformation, but CIOs need to grapple with the ever-persistent problem that only three in ten transformation projects deliver their expected value.
- Addressing Regulatory Concerns: Financial services remains one of the most highly regulated sectors, and CIOs need to address how any innovations meet regulatory requirements.
- Educating the Community and Customer Experience: Finally, CIOs need to be able to address community concerns around the financial system and deliver a leading customer experience.
Financial services post-pandemic
The big challenge that the financial services sector has faced over the past 18 months has been the rapid uptick in demand for contactless banking. People are doing away with cash to instead rely on online banking and contactless card and app options as a way of limiting their exposure and risk of contact-transmitted diseases.
While this is a challenge, it is also an opportunity, and the financial system has currently got an opportunity to leverage transformation and digitalization to reach new customers and provide new services. Digital Financial Inclusion (DFI) is set to become a key discussion point in the years ahead, as the greatest opportunity that financial services have had to date to massively escalate financial inclusion.
This topic will be a key theme of the Huawei Intelligent Finance Summit (HIFS) 2021, which will run from June 3 – 4. Through the summit, Huawei will highlight the five key themes that fall under its “I5 Engine,” a holistic philosophy and technology-driven solution to finance and digitalization.