The FinTech industry attracted over US$13.1b in VC-backed investments in 2016, about five times more than investments four years earlier (see Figure 1). The growth of the industry has strengthened the common belief that FinTech will disrupt banking. But collaboration — not competition — will be the primary driver of disruption.
The biggest near-term threat to most banks comes not from FinTechs but from traditional competitors better leveraging those FinTechs. Our analysis of 45 major global banks reveals that while all banks are engaged with FinTechs one way or another, only around a quarter are extensively engaged due to barriers to collaboration with FinTechs.
In this report we look at some of the common barriers to effective collaboration — from navigating procurement and vendor risk management to technical implementation — and how banks and FinTechs can overcome them.