A senior executive from Bank Mandiri acknowledged in the EIU report that banks were generally slower and more bureaucratic than the industry's technology-driven entrants. Partnering FinTech companies with complementary services would therefore significantly reduce time to market.
Other important objectives cited in the survey are the development of new customer segments and expansion of reach into new markets. AXA, an insurance provider, and LexisNexis, a financial data provider, partnered to refine the insurer's risk-pricing capabilities in its home and auto insurance markets, which enabled it to offer competitive prices to customer segments it had not been able to reach before. In June 2015, enepath, a Singapore company that develops voice recognition technology for trading rooms, entered into a commercial business partnership with Telstra to scale and expand its capabilities into new markets.
Partnerships for the Long-term
The financial services industry is not going to be transformed overnight. However, with governments in countries like Singapore and UK already looking to study and address structural roadblocks that might hinder FinTech adoption, banks and insurance companies must likewise review internal processes and consider digital partnerships that can bring both short-term and long-term benefits.
Atom Bank in the UK is one example of a business that has positioned itself to leverage changing regulations. When it goes live in 2016, Atom Bank will be the first of its kind - a mobile app offering banking services fully licensed by the Bank of England. It will have no physical branches and its website will fulfil only informational and customer support functions. Clearly, in Asia, embracing web-based and mobile platforms for financial services, as some banks and insurance firms have done (with the help of technology partners), can be a significant first step in digital transformation.
At this point in time, banks and insurance companies have not yet been shaken to the core by digital disruption. But as that time draws even closer, firms plugged into a network of digital partners will be in a stronger position to cope and capitalise. More than half of the EIU survey respondents can attest to the fact that digital partnerships have proven their value "beyond doubt." There is no better time than now to start becoming a part of a digital network. Today's senior executives must be able to convince reluctant colleagues of the virtues of digital partnerships, so that their financial services organisations can survive and thrive in the present and future.
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