Apr 26, 2019
Mastercard is a technology company in the global payments industry. It connects consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories.
As traditional financial institutions embrace fintech disruption, a Mastercard-sponsored study from Harvard Business Review Analytic Services identified opportunities for growth, and partnerships. As new technologies and regulations bring more opportunities and challenges to the financial services industry, nearly two-thirds of established companies are leveraging fintech capabilities for growth.
“In the Game: Traditional Financial Institutions Embrace Fintech Disruption” surveyed 300 senior executives at financial services companies to gauge their views on the opportunities and threats brought about by younger, nimbler competitors that rely heavily on specialized software, algorithms, and technology to offer their services.
The Mastercard-sponsored study showed that traditional institutions are “banking” on brand recognition, customer trust, physical distribution channels, and experience navigating the complex regulatory environments to maintain a competitive advantage. In fact, nearly 80 percent do not feel an immediate threat from fintechs.
However, these same executives recognize that fintechs are a threat in the long term. In fact, 65 percent of these executives worldwide believe that fintech competitors will become a significant threat by 2022. This is due in part to fintechs having their own competitive advantages, including agile business practices, digital-first business plans, and an entrepreneurial mindset.
“This report reinforces the importance of collaboration and new partnerships in sparking innovation and new ways of working,” said Michael Miebach, chief product officer of Mastercard. “Many traditional companies are already using technology to improve their business. Yet, there’s an opportunity to realize greater success by thinking differently and combining experience with the agile nature of fintechs.”
Michael Miebach joins me on my daily tech podcast to share some of the most revealing insights from the report.