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Fintech bring more good or bad to Banks?

Fintech bring more good or bad to Banks?


Have you ever use the smart tag or RFID card in your daily life? Imagine today the world without these smart gadget, and how dull is our life? No candy crush, no iwatch, and farmer have to harvest the farm using harvesting knife. And worst still, we are still using those system Barter which exists few thousand years back. I feel terrible and OMG. In today world, technology has bring so many options to the user, you can control the switches of your home by voice control by using Alexa with this iDOBBi Wireless Mini Smart Plug.

Our world has made great progress in technology, smart watch, smart car, smart home and now smart company. Smart bank which used to be very traditional in their client servicing approach, are now welcome all sort of new idea just to let their customer feel good. They are making big steps to improve their customer services, fund services, and product services.

Today landscape in fintech

The startup which focusing their Research and Development in solving old problem with new tools are getting their reward these few years. A company such as StashAway has started to do B2C robo-advisor in Singapore, first Capital Market licensed holder that offer digital investment advisor to their client.

Besides making the process more simpler, more elegant and smooth, Financial technology is changing the landscape and the how economic making transaction today. Established financial services are exploring the variety of opportunities, too, and PwC’s report found that the human resource of banking industry says that their organisation has placed fin tech at their core company strategy.

Challenges in using technology

The main challenge in using fin-tech to solve a business problem is to find a balance between value reduction, operation potency and growth with the pursuit of product related growth. The biggest chance presented by fin-tech is to save cost. They can now perform internal audit process using API. That While above is some example on operation cost saving, which very much different from client retention or to generate extra revenue using fintech. Many of the businesses operating during this space – each incumbent and new entrants – are channelling their energy into taking the huge swathes of information they collect to ensuing level of services meet the professional standard.

Value chain of data transformation
information value increased when your company able to turn the information into prediction and decision making.

With the fast evolution of machine learning techniques, for instance, there’s huge chance for firms will success with the help of  leverage information analytics for correct interpretation and decision-making. The power of computer able to increase the value of financial institutions as the ability to mine the information from the data collected and convert them to value.

What next?

One of the realities banks are operating towards is that the conception of one digital identity for users. The possibility of information sharing between bank user across a different country, using a Common Reporting System (CRS).

The Common Reporting Standard (CRS), developed in response to the G20 request and approved by the OECD Council on 15 July 2014, calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. ~ source fro OECD website.

To the wealthy individual, this system will be their main concern. Let’s imagine if you have 10 million of cash up keep in the offshore bank, and the bank will report to your home country authority about your “net worth”, that transparency of information will eventually make sure the wealthy individual to declare the source of money that they stored offshore. This is the next big thing in coming years. Even the world leader has already made an agreement on this policy, but the execution will take another few years to establish or even earlier, depends on the authority.

Besides CRS, with bigger churn between completely different establishments for savings, mortgages, insurance and different financial services product, the flexibility to quickly establish and onboard a replacement client offers a serious market advantage. Information sharing has made impossible become possible in today world.

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Patrick Goh Mr. Patrick Goh B.S is a research engineer with more than 10 years in industry of IT, Engineering and Financial market experience. In 2013, he joined financial institute’s research team as R&D software engineer mainly researching on technical analysis, inter-market correlation and fundamental factor in leveraged trading instrument using machine learning technique and programming algorithmic trading strategy by quantifying trader sentiment behind the price movement.


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