A new survey carried out by PwC concludes that nearly 90% of traditional companies are running scared as innovative technology start-ups begin to make inroads into the industry, with the majority of global banks, insurers and investment managers likely to strike up partnerships with innovative tech firms over the next three to five years.
The survey, which collated replies from over 1,300 respondents in 71 countries, also found that over three-quarters of the companies intended to adopt blockchain technology by 2020 and up to a quarter were already familiar with its applications, with potential uses in payments, funds transfer and digital identity management.
PwC Channel Islands director David Carney said: ‘Given the leading role that financial services play in the islands, this report is thought-provoking in its assessment of the role of fintech and how the global finance industry is responding to its growth and the competitive threat it poses.
‘The Channel Islands has also invested in the digital sector, and considering the strength and depth of the finance industry, it is highly likely that we will witness increasing partnerships between finance and tech companies, with the opportunity for further innovation – a quality that firms in both jurisdictions have demonstrated time and again.’
Referring to blockchain technology – which essentially provides an additional layer of security to databases or transactions – Mr Carney added: ‘The authorities in both Channel Islands have made it clear that they appreciate the potential of blockchain technology.
‘With products already launched by services providers locally, the jurisdictions are well positioned to capitalise on the growth in blockchain investment globally.’
Other findings to come from the PwC survey were:
- lFinance firms expect an average 20% return on investment from fintech-related projects.
- lFunding in blockchain companies increased 79% year on year in 2016 to $450m globally.
- l88% of respondents are concerned they will lose revenues to standalone fintech firms, with almost a quarter of their revenue at risk.
