Technology firms aimed at the financial services sector should look to collaborate with existing firms rather than compete, a new report has found.
While fintech and insurtech have grabbed the headlines for their revolutionary potential, new work from Capgemini and the University of Sydney Business School has found that opportunities exist for collaboration rather than competition.
Existing firms have been urged to look to partner with tech businesses in a bid to stave off threats from businesses dubbed ‘Big Tech’, such as Apple and Amazon.
Search and compare insurance product listings for Financial Institutions from specialty market providers here
University of Sydney Business School Professor Kai Riemer said that incumbents should not rest on their laurels if fintech falters as the future lies in exploring collaboration.
“We commonly think of fintech as small, digitally-native companies that fundamentally change the financial services market, disrupting and displacing incumbents,” he said. “But what’s becoming clear is that it’s difficult for fintech firms to prove themselves as a viable option for everyday consumers despite the innovation in services.
“That’s not to say incumbents are able to sit back and enjoy their current status – customers are increasingly exposed to new fintech options that offer convenient, engaging services.”
Incumbents like brokers and insurers remain more trusted than their fintech counterparts but tech firms have been able to unveil more customer-centric products which could see their popularity continue to rise.
The pace of disruption is continuing to accelerate, the report found, but as incumbents have the capital to invest in technology they should look to lead the way and become more relevant to their clients.
Tech cannot be ‘one size fits all’
Are regulators holding back insurers on insurtech?