Current fintech products and banks

After the Millennials, the implementation of fintech grows faster than ever before. The
improvement started after the Global Financial Crisis (GFC). It is now widely used in
different industry market like banks, securities companies, and any other institutions that use
technology to make finance to end consumers cheaper, easier to access, and faster. (Barry,
2019) Unlike ATMs back in 1960s, “fintech” today lead to the way to connect with money
and incumbent players.

According to PWC Report, investments budget in Fintech has been growing by over 40% in
2017. E&Y illustrated that over 33% citizens are using at least one Fintech Product in their
daily lives. (Sharma, 2017)

One of the most common drivers in Fintech is payment sectors. For example, now people are
generally use Paypal to pay for online shopping or using cryptocurrency. Then, payments are
also use in insurance an investment sector. For example, peer-to-peer investment platforms
are used by Commonwealth Bank app to transfer money for consumers. Gradually, lending
platforms join the FinTech party to use website budgeting tools and financial planning. Given
PwC global FinTech survey 2017, Artificial Intelligence, Mobile development, and
blockchain are the most popular products. (shown in Table 1)
Table 1
Peer-to-peer financing

Global internet helps crowdfunding platforms to exploit innovative technology to raise fund
and find potential consumers. More than this, peer-to-peer financing also includes peer-to-
peer lending. P2P lending matches people who has money to invest with those who needs
fund. This industry has become a powerful alternative and competitor to the traditional
banking systems. (Bajpai, 2019) Online platforms (website) are usually used to match the
team. This Fintech product works similar to banks as an middleman – allocating capital from
investors to borrowers. (ASIC, 2019)

Lower interest rate and simple access are major competitive advantages of P2P model.
Lenders provide online platforms to allow customers to borrow directly online, passing
banks. (Yeates, 2018). PwC report indicated that although there are drawbacks of this
Fintech, the US P2P platforms issued loan of $5.5 billon in 2014. They estimate that the
number will rise to $150 billion by 2025. (PwC, 2016)

In Australia, SocietyOne is the first P2P lending company founded in 2011 by Matt Symons
and Grey Symons. In 2017, SocietyOne reported that they had over 13,000 customers with
$325 million provided by funders. By June 2018, this number reached to $465 million. As a
successful P2P company, they raised $7.75 million in capital and raising $400 million in
originations. (SocietyOne YR2018 10-K Report, 2019) By providing loans with lower rates,
no ongoing fees, and easier application procedures (shown in diagram 2), P2P lending proves
an successful Fin-tech in Australia, aligning with consumers’ demand.
Diagram1: SocietyOne Announcements

Diagram 2: SocietyOne Advantages

Cognitive Artificial Intelligence and Computing

While artificial Intelligence already appears in search algorithms to computing financial data.
AI computing makes the data analysis easier and faster. In traditional systems, it costs both
physical and human resources when analyzing. Cognitive AI computing is far beyond dealing
with data and numbers, they are tools which provide valuable business insight to optimize
decisions. IBM Watson is an example that is continually improved to help portfolio managers
to make decisions. Another example is that Commonwealth Bank partnered with Kounta, a
fintech company, to build Albert AI platform to improve data analysis. (Commonwealth
Bank of Australia, 2016).
Under pressure from non-bank competitors, banks also began to implement FinTech to
maintain market shares and the profits. As of PwC report, 73% financial sector executives
perceive banks as one of the most likely to be disrupted by FinTech. 2016 is important for
Fintech give the improvement accelerate faster and gained large breakthrough.

Digital Banking

Mobile Payments
Payments sector valued the FinTech top pyramid. Mobile payments apps are widely used in
everyone’s daily life. It reduced both time and costs. In China, mobile payments are almost
fully popularized with Alipay and WeChat pay. In 2017, Both Alipay and WeChat pay
handled more in single month than Paypal’s total year payments ($451 billion). (Fraser,
2018) In Australia, Commonwealth continually to be digital banking with 7 million active
digital consumers. CBA announced to invest $5 billion over next five years to improve
system and service. (Nott, 2019).

Blockchain
“The future is blockchainization”. As one of the most convenient environments that AML
regulation applied, banks accelerate the footsteps to use blockchain to improve their systems.
For example, Westpac has begun experimenting with blockchain and robots. (Fenech, 2018)

References

Perzhanovskiy, N. (2019). The impact of FinTech on banks and financial services. Justcoded.
Retrieved Oct 7, 2019, from https://justcoded.com/blog/the-impact-of-fintech-on-banks-and-
financial-services/

Sharma, G. (2017). Top 10 most promising FinTech innovations and technologies. Disruptor.
Retrieved Oct 5, 2019, from https://www.disruptordaily.com/top-10-promising-fintech-
innovations-technologies/

Bajpai, P. (2019). The 6 Best Peer-To-Peer Lending Websites. Investopedia. Retrieved Oct
5,2019, from https://www.investopedia.com/articles/investing/092315/7-best-peertopeer-
lending-websites.asp

Yeates, C. (2018). High-society fintech under pressure to perform for billionaire backers. The
Sydney Morning Herald. Retrieved Oct 5,2019, from
https://www.smh.com.au/business/banking-and-finance/high-society-fintech-under-pressure-
to-perform-for-billionaire-backers-20181003-p507gt.html

Barry, E. (2016). PwC report highlights how Australian fintech is already helping consumers.
Finder. Retrieved Oct 4,2019, from https://www.finder.com.au/pwc-fintech-australia

Fraser, I. (2018). Chinese payment giants are lightyears ahead. Raconteur. Retrieved Oct
4,2019, from https://www.raconteur.net/finance/alipay-wechat-china-payments

Nott, G. (2019). CBA to maintain digital 'leadership position' with $5B strategy, fintech
investment. CIO. Retrieved Oct 4,2019, from https://www.cio.com.au/article/665025/cba-
maintain-digital-leadership-position-5b-strategy-fintech-investment/
Fenech, G. (2018). Banking and Fintech on the blockchain. Forbes. Retrieved Oct 4,2019,
from https://www.forbes.com/sites/geraldfenech/2018/12/14/banking-and-fintech-on-the-
blockchain/#25509d895bbe