Hellenic Open University Conferences, International Conference on Business & Economics of the Hellenic Open University 2017

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Financial Technology: friend or foe? Will FinTechs reconstruct the banking system?
MARIA ARETI SPILIOPOULOU, Evangelos Manouvelos

##manager.scheduler.building##: Titania
##manager.scheduler.room##: Platon
Date: 2017-04-22 11:00 AM – 01:00 PM
Last modified: 2017-04-11

Abstract


In recent years, investments in financial technology experienced a significant increase. FinTechs are those companies that use new technologies and innovations in order to enhance or replace existing financial services. They create flexibility through new services that do not have the same cost structure, bureaucracy or technical debt as in the banking system. Their success is based on their ability to innovate and develop more simple and attractive offers to customers.

 

FinTech services can differentiate into many areas: banking and insurance (InsurTech),business processes (payments, investments, financing), targeted customer groups (retail, private, corporate),B2B, B2C or C2C services, and management systems. Banks are forced to compete with startups and FinTech companiesin order to improve their offers and update their systems. The development of FinTech services pushes banks to become more efficient,more personal, cheaper and easier to use. Banks’ answer is to focus on specific areas that need immediate improvement, while trying to create ground for cooperation with Fintech companies and startups. Yet FinTechs are currently profiting from the trend around digital customers and new technologies, a smaller regulatory burden and the banking system’s "legacy burden". All these cases might change. FinTechs are also obliged to develop advanced analytics and algorithms in order to manage and dare any kind of fraud, since total digitalization of services may result in more credit, market and operational risk.  Despite these issues, banks need to be open to new solutions and learn from FinTechs' working methods. Digital innovation is a priority and FinTechs create challenges and opportunities in the financial industry.

 


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