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Cdbbank: Fintech and The Future of International Banking

Cdbbank: Fintech and The Future of International Banking

In the area of International Banking, fintech is one of the most exciting and topical areas in global business today. The emergence of a new generation of financial technology has, in a short time, had a considerable impact on how to do business, transact as customers and think about the financial future. Investment in the sector, according to a study by KPMG in 2017, is over US$100 billion and it continues to grow.

In the past couple of years, relationships between banks, fintechs and bigtechs are evolving rapidly, while it is becoming more evident that, despite the initial caution and mistrust, all players need to use each other’s core competencies for International Banking to grow correctly. 

But what is driving this innovation in the financial services of International Banking?

Some key points are: 

The lower barriers to entry because of new customer access methods, such as the mobile phone replacing the retail bank branch. 

Affordable infrastructure, such as analytics, artificial intelligence, cloud computing and social technologies. 

New currencies and credit systems affecting incoming banking and investment players and changing consumer behaviour and expectations from financial services providers.


Fintech has also, created a space for financial inclusion, another major turning point, leading to the rise of emerging markets. Because of mobile internet access, consumers who previously could not access financial services can now do so via their mobile phones, resulting in opportunities for fintech start-ups to capitalise on the emerging markets in the global south (Africa, Asia, and South America). Combined with the rise in international challenger banks, this means that a major source of revenue for traditional banks will be significantly affected in both emerging and traditional markets.

How is International Banking Affected? 

International Banking will be affected in four key areas.

(1) How the future of money will be shaped through Distributed Ledger technology (known as blockchain) and digital currencies, such as the Central Banks Digital Currency project which will impact deposits, bitcoin and ripple as well as peer-to-peer transfer technology and mobile banking.

(2) The future of markets. Pervasive mobile and social technology and the emergence of new network-enabled markets are changing the financial services industry drastically. Among others, this can be seen through prediction markets and collective intelligence, peer-to-peer crowdfunding and equity funding, artificial intelligence, automated advice and wealth management.  

(3) The future of marketplaces. Traditionally marketplaces have been one sided; today, however, there are many examples of two-sided marketplaces, e.g. peer-to-peer lending, as well as new marketplaces such as financial services for the unbanked and SMEs. Some of the current trends in marketplaces include the app Marcus by Goldman Sachs, allowing a traditional Investment Bank to enter the retail market, and Revolut entering the lending market, new payment platforms, mobile, financial inclusion, blockchain and the marketplace stack. 

(4) Last but not least, infrastructure: the system that enables the movement and regulation of transactions in the financial services space, which has been radically altered by technology. Traditionally, banks controlled the transfer of money and related processes. However, because of recent technological innovation, there are faster and better ways for people to transact. Key areas are improvements in identity, security and privacy, cybersecurity and regulatory technology (Regtech). Also, converting laws into code and sharing it between banks across special platforms is paving the way for faster compliance checks.

Nevertheless, the biggest competitor to International Banking is not fintech, but the legacy core banking systems. In this customer-driven environment, the future is about fintech and banks joining forces to benefit from each other. 
Many forward-thinking International banks, financial incumbents and other large organisations have begun to develop strategies to foster innovation and remain relevant in the face of the uncertain future of financial services.





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