/ / INSIGHTS

Look out Fintech: It’s a bumpy but fruitful road ahead

Authored by: Sandeep Kumar, Managing Director - Capital Markets, Sales, Synechron

Look out Fintech: It’s a bumpy but fruitful road ahead

The last two years or so have been like a rollercoaster ride in the land of blockchain. Both existing and new players have been considering and evaluating the opportunities and the downsides of this important technological development.

The hype surrounding financial technologies soared over the last five years as the industry saw venture capitalists (VCs) pour billions into the space. According to a report by CB Insights, global investment in private fintech companies totaled $5.7 billion in Q1 2016, with $4.9bn of it across 218 deals. However, despite a 98% YOY jump, the report also found part of the growth is related to 3 mega-deals, indicating a possible slowdown in momentum.

The question is: Are investors running out of patience to see tangible results from fintech?
2017 could be a year of reckoning for fintech companies that might lose their shine if they do not begin turning over profits. Taps will start to shut off if the once massive potential of fintech fails to envisage or if the market is not conducive for a healthy IPO. This, however, doesn’t come as much of a surprise, as most technology VCs expect only one in 10 investments to pay off. Effectively, this means the much-hyped cycle of fintech may get a dose of commercial reality and start to feel deflated sooner than later. The pressure is on for fintech firms, but there is strong potential ahead, if they focus on the right areas.

Regulatory Technology (RegTech)

Financial services business leaders instead are shifting their immediate focus toward tangible business solutions while keeping innovation and automation on their long-term agenda. The results from Synechron’s Top Financial Services Trends in 2017 survey conducted by TABB Group which received feedback from 200+ senior-level, global financial services business and IT decision-makers across the U.S., U.K., and Europe, shows that C-suite executives are pushing regulation up this year’s priority list. Regulations like MiFID II (42.6%), Dodd-Frank (29.6%), the DoL Fiduciary Rule (15.3%) and Basel III (15.3%) dominate their concerns

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