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FinTech Start-ups Driving Digital Transformation are Disintermediating 'Analog-Era' Banking and Capital Markets Firms: TABB ResearchTraditional banking and capital markets firms have remained largely impervious to the digital revolution. However, as fintech start-ups have become a white hot area of interest and investment, there has been a massive tectonic move within the more traditional financial markets ecosystem to catch up and compete with these new digital-era entrants, threatening to disintermediate large, "analog-era" banking and capital markets business. With change comes doubt, if not internal challenges. According to new TABB Group research, "Digitized Markets: Opening the Door on Human Latency," written by consulting analyst Paul Rowady, the arrival of this industry tipping point raises questions: How much of the digital transformation is actually a rebranding of an organizational change management exercise of eras past? And how can market participants distinguish between their need for more traditional evolutionary change and the contemporary need for more revolutionary change? TABB Group believes there is a willingness now to implement digital-age innovations, driven by regulatory fatige; competitive threats from new entrants "floating on clouds;" impact of persistent low volatility and low interest rates on performance; and an increasing maturity, reliability and security of digital-age technologies. "This technical disruption has already grown to a point where it's threatening payments, lending and investment advisory areas," says Rowady. The era ahead, he adds, may well be marked with a greater uptick in innovation, eliminating dependence on staff responsible for specific tasks and processes, than the financial markets ecosystem had experienced in the first era of the modern capital markets. "Though digitization likely means industry-wide reduction in net headcount, it is also likely to require a shift in the mix of skillsets. However, without digital sponsorship from the C-suite, if not the CEO, meaningful cultural change will be difficult and need to come instead from strong and influential middle managers." The 17-page, 6-exhibit report, which details the significance of cultural and other human-centric impediments to digital transformation, the role of open platforms and technologies as a foundation for digital transformation, and the need to distinguish between evolutionary and revolutionary change, and pinpoints key strategies for fostering digital transformation within financial industry firms, is available for download by TABB's Research Alliance Data and Analytics clients and qualified media at http://www.tabbgroup.com/Login.aspx. For a copy of the Executive Summary or to purchase the report, write to [email protected]. About TABB Group With offices in New York and London, TABB is the only research and consulting firm focused exclusively on capital markets, based on the interview-based, "first-person knowledge' research methodology developed by Larry Tabb. View source version on businesswire.com: http://www.businesswire.com/news/home/20150811005122/en/ |
