A really interesting article about the rise of fintech in US banking. The parallels for insurance are 100%.
The banks are already losing or have lost the battle. Will the insurers just sleepwalk their way into the same problems?
IT-related expenses account for about 10% to 15% of financial institutions total expenses. However, many banks and credit unions question whether their investments in financial technology are providing a good enough return on investment. Are banks and credit unions destined to be usurped by fintechs with the capital and the know-how to reimagine banking for today's mobile-first world? Traditional financial institutions may have the scale and the customer base, but when it comes to innovation new entrants are leaving everyone else in the dust. Financial institutions in the U.S. have — thus far — been able to stave off the threats posed by fintechs. According to a report commissioned by Citi, only about 1% of consumer banking revenue has moved to newer digital models. However, Citi predicts that percentage will rise to 10% by 2020, and 17% by 2023.