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Capgemini: Banks roll out digital experiences to compete with fintech

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Despite a volatile environment, the fintech industry saw 11% year-on-year transaction activity growth in the fourth quarter of 2020, after four consecutive years of decline, IT services and consulting firm Capgemini said. in its latest Global FinTech Report. Fintechs with a diverse product portfolio are also gaining support from investors.

Above: Fintechs are popular, but few are profitable. [Year] represent the year the business was launched and the years inside the boxes represent the year the business became profitable.

Image Credit: Capgemini

Many fintech startups are approaching their next stage of maturity: profitability.

As an industry, fintech has shown resilience during the COVID-19 pandemic with verticals showing double-digit growth despite operational and financial challenges. With the growing popularity of fintech, traditional banks are creating digital-only entities to attract specific customer segments. The annual World FinTech report explores how successful fintech startups broke the barrier to profitability and analyzes alternative options for banks to mitigate the competitive threat.

As fintech companies have stepped up the pressure, consumers still trust traditional banks more: Even as consumers prepare for fintech, they still trust traditional banks, and 68% said they would try a digital-only offer operated by their main bank.

The potential for transparent digital engagement is clear: Incumbents are preparing to build on their strengths while addressing their weaknesses to remain relevant in the future. Of banking executives surveyed, 63% said that a digital-only affiliate enables ubiquitous banking, 50% said it accelerates new products to market, and 52% said it facilitates collaboration through the plug-in functionality. -and-play.

The World FinTech Report 2021 draws lessons from two main sources: The Global Voice of the Customer Survey 2021 and Executive Surveys and Interviews 2021, which cover information from 33 markets. The Voice of Customer survey counted 8,559 customers with a 22% response rate in the Americas, and the Executive Survey collected information from 122 bank executives with a response of 29% from Tier 1 banks (active > 50 billion USD) and 71% of level 2 banks (assets <50 billion dollars)

Read the full Capgemini World FinTech report.

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