Global fintech Disruption - Is it relevant to my small business?

“Silicon Valley is coming.”, says JP Morgan’s CEO Jamie Dimon in his annual letter to shareholders last year.

According to a recent research published by Citigroup named “Digital Disruption”, radical change is coming. Today, global Fintechs have captured just $9 billion in businesses thus far, a relatively small percentage of what banks take in every year. But Citigroup is predicting Fintech revenues to increase 10x fold, exceeding $100 billion in next 4 years by year 2020. Give it another 3 more years, Fintechs are expected to account for 17% of consumer-banking services in North America. More strikingly however, the upcoming fintech revolution may wipe out nearly 1/3 of all employees at traditional banks over the next decade.

Business Intelligence


Singapore has been leading the way in embracing technology as part of the Government’s initiative to build a Smart Nation and not long ago back in May-2016, the financial regulatory of Monetary Authority of Singapore (MAS) has launched UK’s first ever “FinTech bridge” with the Financial Conduct Authority (FCA) of the UK.


We came across this great piece by Stephen Gandel from Fortune magazine that talks about how Citigroup is embracing the Fintech revolution. Today, lots of traditional businesses are not operated efficiently and there are lots of customer pain points thanks to cumbersome processes and regulations. Thankfully, with technological advancement over the past few years, particularly the mass adoption of smartphones and regulatory changes, doors are now open to a new group of nontraditional entrants into the banking business. The wave of fintech revolution is just beginning, and as business owners, we shall think of ways to embrace it, and ride the wave.


Citing banking as an example – Disruption is coming from everywhere: Payments, lending, treasury functions, wealth management, retail banking and even in investment banking. Today, there are programmes that make use of latest big data technology and machine-learning techniques to analyze how real-world events affect markets, potentially displacing financial analysts. If you are in a traditional industry, it pays to pay attention to up and coming technologies to improve efficiency of your workforce (for Singapore employers you may take advantage of government subsidies or grants if you can), or lower your costs of operations, so as to compete in this increasing frictionless world.

Chart below (source from Fortune) shows different Fintech Startup players in various segments of the financial chain:



“Disrupt, or Be Disrupted”

Ever-since investors start pouring in tens of billions of dollars into global fintech sector, “Disrupt, or be disrupted” has become a popular catch phrase among the business community. According to KPMG’s “The Pulse of Fintech” in Q1 2016, Asia has seen $2.6 billion raised with 36 deals, surpassing North America’s $1.8 billion at 128 deals. Refering Citigroup’s journey, we would suggest your business to take the following baby steps and start innovating:



1) Make it less painful for your customers – Take the example of the owner of a Singapore-based online business, that deals with foreign suppliers or customers. You would have nagged or complained about the payment processes that traditional banks offer. Simply, cross-border money transfers are a pain in the ass. Consider brain-storming with your team if you could solve certain customer pain points when it comes to getting them to pay you, or paying your suppliers more quickly. There’s an increasing mix of offering of payment solution providers that makes it a breeze to transfer money.


2) Watch your disruptors (or new friends) – Citigroup’s fintech department has a five-by-10-foot chart that lists all their technology competitors that would potentially disrupt their different lines of businesses. You may not be running the same megabuck businesses as Citigroup but you might be surprised with the cost savings or efficiency improvements when you list our your competitors (friends or foe?) offering. They are making it easier to do business. For Singapore businesses, do not forget to check out SPRING’s Capability Development Grant (CDG) that may reimburse up to 70% of your costs if your new tool or software fits under the right scope.


3) Rapid proto-typing – The last recommendation we wish to borrow is ‘rapid proto-typing’. Is there some projects you could work intensively in two or four-week sprints? Those may increase the odds of transforming certain functions within your company and increase your competitiveness down the road.


Leading economies like the US, UK and Singapore are getting more future-ready. Is your firm ready to disrupt yourself, or would you wait to get disrupted?


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