Financial technology has been the buzzword in quite a few investment and financial services for long enough now for some observers to ask whether it really will deliver on expectations. It may be an obvious and lucrative focus for technology savants, but the debacle over co-working space company WeWork, and to a lesser extent ride-hailing company Uber, has shaken general faith in the future of tech-enabled business disruption.

Even as traditional financial firms are being asked whether their timeworn business models can survive the technology challenge, proponents of fintech are also under more critical examination regarding promise versus genuine prospects.

To be sure, the death knell has been rung over the old guard of pre-internet financial services brands on more than one occasion. And many of those firms are still here. Those that aren’t often have other challenges than technological change to blame.

All the same, fintech is often cited as a major threat to financial sector incumbents. But people like Will Haskins, Asia fintech head at Money 20/20, see the picture as one of synergy and cooperation rather than conflict. He believes that fintech companies, instead of being the inevitable successors to traditional banks, insurance companies and investment managers, have ended up being their most trusted service providers, “the simple reason being that while consumers like tech companies, there is a trust deficiency, and while they may not like financial firms, they trust them”.

As a result, he says it’s become “prohibitively expensive” for most fintechs to take business away from the traditional finance houses, especially at the top end of the market. It makes better financial sense for the fintech firms simply to supply fintech to the asset managers and others.

According to Paul Spronk, head of ING Labs in Singapore, collaboration works best because the traditional financial players “can’t do everything by ourselves”. Indeed, they can make up for the fintech companies’ own shortcomings. The fintech firms can supply “agility, creativity and entrepreneurship,” while the longer-established businesses can provide “a strong brand, a large client base with an international footprint,” and breadth of industry expertise, he says.

Read more at Money 2020!

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