KPMG International
How financial institutions
are embracing fintech to
evolve and grow
Forging
the future
kpmg.com/fintechreport
The financial services industry is undergoing a paradigm shift. Emerging technologies
like artificial intelligence (AI), machine learning, the Internet of Things (IoT) and
blockchain, combined with ever-changing customer expectations and preferences,
are redefining how financial institutions deliver services.
Remaining competitive in this constantly changing environment is an enormous
task. Banks, insurers and asset management companies are undertaking major
transformation efforts — transitioning from complex legacy technology environments
to more agile operations, and creating more efficient compliance processes that fully
satisfy evolving global and jurisdictional regulations.
Financial institutions see startup financial technology firms — or fintechs — as a major
part of the digital future. As evidence of this, financial institutions have invested more
than US$27 billion in fintech and digital innovation since 2015.1
However, corporate investment is only part of the landscape. To understand how
different organizations are approaching the strategic opportunities presented
by fintechs, we conducted a survey of more than 160 financial institutions from
36 countries. We also held in-depth interviews with executives from leading financial
institutions and our own financial services partners from around the world.
Our research shows that while financial institutions recognize that fintech is
a substantial disruptor, no single path has emerged to define how companies
should approach fintech. Leading financial institutions are pursuing many different
avenues — including partnering, buying, sourcing and investment strategies.
One key best practice across leading financial institutions is strategy: having a clear
fintech strategy that aligns to organizational objectives, considers current assets
and capabilities, and includes an execution plan for addressing gaps and managing
a transformation that may never have a defined end point as fintech will continue to
evolve.
There is no clear winner when it comes to fintech today. Every organization has the
opportunity to forge a new fintech future and win against their competition.
We hope this report will provide a useful resource for understanding how different
financial institutions are approaching fintech, and factors to consider as you define
your own path forward. If you would like to discuss our findings in more detail or
learn what your organization can do to get the most value from fintech opportunities,
please contact us or your local KPMG partner.
Foreword
Ian Pollari
Global Co-Leader of Fintech,
KPMG International and
Partner and National
Sector Leader, Banking
KPMG Australia
Murray Raisbeck
Global Co-Leader of Fintech,
KPMG International
and Partner, Insurance
KPMG in the UK
1 KPMG Pulse of Fintech (data provided by PitchBook) https://home.kpmg.com/xx/en/home/
insights/2017/07/the-pulse-of-fintech-q2-2017.html
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Contents
04 08
18
30
The fintech
imperative
Building the
right foundation
Integrating
fintech
The road
ahead
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
The fintech
imperative
Forging the future: How financial institutions are embracing fintech to evolve and grow
4
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Fintech is the biggest disruptor of our time for financial institutions.
Fifty-seven percent of our survey respondents ranked it as number
one, ahead of growing global regulatory complexity (51 percent)
and new business models (46 percent). Whether it’s providing new
ways to enhance the customer experience, responding to regulatory
change (such as open banking), underpinning new payments or
digital delivery models, making service delivery faster and more cost
effective, or improving the efficiency of back-office functions —
the myriad fintech solutions now available, or in development, are
helping to rapidly reinvent the entire value chain of financial services.
The swift evolution of fintech has
forced traditional financial institutions —
banks, insurers and asset management
companies — to face a new reality.
Products, services and business
models that have worked for decades
are no longer an option in the digital
world. Legacy infrastructure must be
replaced or augmented by newer, more
efficient technologies.
To thrive, organizations recognize that
they need to reinvent what they do
and how they do it. Competitors are
evolving too, and it’s not just fintechs
knocking on the market door — large
tech giants, retailers and other global
companies are looking for ways
to provide the financial services
customers want.
Top three greatest sources of disruption — all respondents
Emerging financial
technologies (fintech)
Growing global
regulatory complexity
New business models
Increased cyber threats
and data security breaches
Increased customer
adoption of mobile devices
Increased number
of retail channels
Passive strategies/products
Changing customer
demographics in key markets
Labor and talent
shortages
Competition from
new entrants
Source: KPMG International global fintech survey, 2017
57%
51%
46%
33%
23%
22%
17%
13%
11%
5%

Financial institutions too
often deal with fintech
in a very inefficient,
fragmented and tactical
manner. The companies
that succeed have
undertaken careful
architecting of their
transformation strategy,
including the integration
of fintech within their
organization.
Murray Raisbeck
Global Co-Leader of
Fintech,
KPMG International
and Partner, Insurance
KPMG in the UK
5
Forging the future: How financial institutions are embracing fintech to evolve and grow
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Consumers expect more
from their financial
services providers
Over the past 5 to 10 years, there has
been a rapid shift in how consumers
view financial services companies.
Many consumers want financial
institutions that are able to respond
quickly to their needs with products
tailor-made to them. We are seeing
this across all industries. In our 2017
Top of Mind Survey2, 29 percent of
respondents expected increasing
demand for personalization to be the
most disruptive consumer behavior
trend over the next 2 years.
In an era where retail products can
be ordered and delivered in the same
day, it’s no surprise that people want
their financial transactions to also
occur in real time — and for decisions
related to their mortgages, insurance
coverage or other financial needs to
be made in moments rather than days
or even weeks. Consumers also want
transparency, and complex financial
matters explained to them in clear,
relevant terms that make sense within
their day-to-day lives and that align
with their overall financial goals.
“It’s not just fintech causing a shift
in consumer expectations. A lot of
the change we’re seeing in customer
experience expectations is driven
outside of financial services,” explains
Ian Pollari, Global Co-Leader of Fintech,
KPMG International and Partner and
National Sector Leader, Banking,
KPMG Australia. “Large tech players
have done very well in the context
Santander UK has licensed the Kabbage platform to power
automated lending to small and mid-sized businesses throughout the
UK. The platform enables Santander to accelerate the underwriting
process for businesses looking for loans up to 100,000 British
pounds (GBP) online — reducing the amount of time required to
process requests from 2–12 weeks to as little as 24 hours.3
of applying data analytics, AI and
cognitive thinking to personalize the
customer experience and take friction
out of business processes. When
companies like Uber and Netflix can
do it, consumers expect all companies
should be able to.”
The challenge of
competing priorities
Financial institutions have long felt
the pressure to both modernize
their infrastructure and respond to
changing customer demands and
expectations. The obstacle for many
is that they already face a complex
array of urgent issues that constantly
vie for management attention and
investment.
For example, financial institutions
around the world continue to spend a
lot of time and resources to ensure they
remain in compliance with changing
industry regulations, such as the
Payment Services Directive 2 (PSD2) in
Europe, and participating in the rollout
of new infrastructure, such as the New
Payments Platform in Australia.
Legacy infrastructure is also a
major stumbling block for financial
institutions, some of which have been
using the same mainframe systems
for decades. Executives face frequent
decisions about whether to allocate
capital to keeping the lights on in the
existing infrastructure, or allocate it to
digital development.
Concerns about maintaining day-
to-day operations can significantly
hamper the ability of organizations
2 https://home.kpmg.com/xx/en/home/insights/2017/06/top-of-mind-survey-2017.html
3 https://www.ft.com/content/9925cc9e-f9a4-11e5-8f41-df5bda8beb40
Case in point: Bank invests in and partners with
a fintech for a small business loan solution
Case in point legend
Build
Buy/
invest
Partner
We see tremendous
opportunities to
accelerate growth by
partnering with other
scale providers.
At NAB, we’ve
already established
strong partnerships
with the likes of
REA and Xero. It’s
critically important
for banks to shift
their focus from
products and service
to gaining a deeper
understanding of the
customer, and how
to help them solve
problems through
their preferred
channel. Working
with scale providers
is a great way to
achieve this goal.
Jonathan Davey
Executive GM Digital,
NAB Labs & NAB
Ventures, National
Australia Bank
Forging the future: How financial institutions are embracing fintech to evolve and grow
6
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
to focus on innovation. Institutions
with complex systems can also find
themselves hindered when asked to
incorporate new financial technologies
as the ability to integrate their existing
systems with new, agile fintech
offerings is often costly or unfeasible.
A constantly evolving set of ‘burning
platform’ priorities makes it difficult
for financial institutions to give fintech
the attention and resources needed
to drive better business value. This
has led many organizations to simply
focus on resolving one issue at a
time — usually the issue with the
most pressing time frame for action,
rather than the one that will lead to the
most enduring value.
“Financial institutions too often deal
with fintech in a very inefficient,
fragmented and tactical manner,” says
Murray Raisbeck, Global Co-Leader
of Fintech, KPMG International and
Partner, Insurance, KPMG in the UK.
“The companies that succeed have
undertaken careful architecting of their
transformation strategy, including
the integration of fintech within their
organization.”
Even among financial institutions
that have moved forward with
fintech initiatives, it has not been
clear sailing. There has been friction
within companies that have tried
to integrate and scale fintech.
The integration of old and new
technologies, not to mention traditional
and startup corporate cultures, is
not an easy task to undertake, and
there is no straightforward solution to
ensure success.
Redefining possibilities
The increasing pressure from both
customers and organizational
stakeholders, combined with a
proliferation of technology options and
competition from maturing fintechs, has
moved fintech to the top of the growth
agenda for leading financial institutions.
Executives at these organizations
realize that sticking to the status quo
is likely the greatest risk to the future
success of their business.
So where are the leaders?
When it comes to responding to fintech, we see
a cohort of leaders emerging that share common
strategies and capabilities. Over half our survey
respondents see themselves on par with their
competition when it comes to fintech capabilities. At
the same time, new fintech companies that want to
take a bite out of the financial services market have
found such a move isn’t as easy as they might have
thought.
What this means is that much of the financial
services market is still wide open when it comes
to opportunities to demonstrate leadership in the
fintech arena. Incumbent players have a great
opportunity right now with respect to driving value
from fintech given they have significant customer
relationships, capital resources and an established
reputation.
While most organizations don’t see themselves as
leaders in this space, there are many success stories
from leading institutions, and we have shared these
examples throughout the report.
4 http://www.insurancebusinessmag.com/ca/news/breaking-news/aviva-to-slash-prices-with-gamechanging-concept-65437.aspx
Aviva recently launched a new
initiative aimed at leveraging
big data to reduce the need to
ask customers questions. The
‘Ask It Never’ initiative is being
piloted with customers through
the MyAviva online portal and
aims to reduce the number of
forms customer must fill out to
obtain new policies with a view
to improving the online buying
journey and more accurately
price premiums.4
Case in point: Insurer
builds a solution
to improve the online
buying journey
How financial institutions compare
themselves against their competitors
in terms of fintech capabilities
Ahead of
competitors
On par with
competitors
Behind
competitors
20%
51%
29%
Source: KPMG International global fintech survey, 2017
7
Forging the future: How financial institutions are embracing fintech to evolve and grow
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Building the right
foundation
Forging the future: How financial institutions are embracing fintech to evolve and grow
8
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Achieving business success typically starts by developing a
focused and clear business strategy. What financial institutions
have learned is that getting the most value from fintech requires
the same degree of focus and attention. It’s very difficult to make
the most of fintech opportunities organization-wide without
clearly assessing where a financial institution is today and where
it wants to be in the future.

In order to achieve
the most from
fintech opportunities,
companies in financial
services need to treat
fintech innovation as a
mainstream activity —
and incorporate it within
and across their entire
organization.
Tek Yew Chia
Fintech Leader for
KPMG in Singapore
Moving beyond
experimentation
Almost 90 percent of our survey
respondents either have a fintech
strategy in place or are currently in the
process of developing one. Having a
strategy for fintech, however, does
not necessarily mean it is the right
strategy for an organization. In fact,
less than half of those organizations
with a fintech strategy believe that
their strategy is well aligned to current
fintech challenges and disruptions.
Also, it’s important to remember that
a full strategy is significantly more
involved than having a venture capital
(VC) fund or a list of fintechs the team
has met. Given the fact that many
financial institutions are still relatively
early on in their fintech journeys, we
expect a large proportion of them have
yet to form a fully developed strategy
for fintech.
5 https://www.crowdfundinsider.com/2017/06/101260-insurtech-app-trov-connects-axa-insurance-celebrates-uk-launch/
Insurer AXA is partnering with Trov to launch an on-demand,
mobile-first service that enables customers to buy flexible insurance
for individual items. The app allows customers to turn insurance on
or off for a particular item — one day at a time — without the need to
interact with a traditional insurance agent.5
Case in point: On demand insurance
Where are financial institutions when it comes to
having a fintech strategy?
Total
Source: KPMG International global fintech survey, 2017
Banking
Insurance
Asset
Management
Yes, have a fintech strategy
Strategy in development
No strategy in place
Unsure
AC
46%
50%
43%
54%
16%
20%
64%
37%
11%
42%
10%
2%
3%
2%
9
Forging the future: How financial institutions are embracing fintech to evolve and grow
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
How well aligned are strategies with current fintech
challenges and disruption?
Total
Banking
Insurance
Asset
Management
Not aligned at all
Somewhat aligned
Well aligned
48%
52%
65%
35%
81%
19%
Source: KPMG International global fintech survey, 2017
53%
47%
Munich Re has partnered
with PrecisionHawk, a
global, drone data platform,
to improve the speed and
accuracy of reporting in
the aftermath of a natural
disaster. PrecisionHawk’s
software collects and
analyzes drone imagery
immediately following a
disaster, enabling Munich
Re to accurately assess
damages and quickly
respond to claims.6
Case in point:
More efficient
natural disaster
insurance claims
assessment
The challenge typically lies in what
comes first. Technology is the source
of innovation for many financial
institutions, but it is easy to get
wrapped up in the excitement of a new
technology and forget about making
sure it can be used to benefit customers
and organizations.
It’s not unusual to find new technologies
being championed within a financial
institution because they are interesting
and compelling. People will try to find
problems for the technology to solve,
rather than starting with a problem and
looking for a viable solution.
Over the long-term, these ‘cart-before-
the-horse’ technology initiatives can
create roadblocks for organization-
wide initiatives. For example, fintech
solutions implemented in different
business units may not be fully
integrated, requiring gaps to be bridged
or rollback solutions in order to address
organization-wide future needs. Any
misalignment of initiatives can be costly,
both from a resource perspective and
from a rollout perspective.
Fintech must be considered from a
holistic business viewpoint. An ad hoc
adoption strategy leads to expensive
mistakes that companies can avoid.
Banking is considered to be the
most mature of the financial services
subsectors when it comes to embracing
fintech opportunities. This may reflect
why companies in the sector are more
focused on delivering cost efficiencies
than the others; many banks have
already spent years on initiatives aimed
at enhancing the customer experience
and are now turning their attention to
other objectives.
At the same time, insurance and
asset management are making
strong inroads. For example, in asset
management, we’re seeing companies
shift from being passive players in terms
of expecting business to come to them
to a more proactive position focused on
attracting business and understanding
customer needs.
6 http://www.precisionhawk.com/media/topic/precisionhawk-munich-re/
7 https://wegolook.com/company
Claims-management
solutions provider
Crawford & Company
recently acquired
a majority stake in
WeGoLook, an online
and mobile collaborative
economy platform.
Together, Crawford and
WeGoLook are looking to
automate and expedite
the claim handling process
by leveraging over 30,000
on-demand inspectors
(Lookers) across the US
and Canada.7
Case in point:
Expediting
claims handling
with on-demand
inspectors
Forging the future: How financial institutions are embracing fintech to evolve and grow
10
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
 
Clarity of vision: Concrete vision for the future and a CEO and leadership team thoroughly
committed to seeing the vision implemented.
Aware: Aware of the signals of change occurring in the financial services market and is
constantly seeking insights into how fintech is and will evolve in the future.
Strategic: Well-developed yet adaptable strategy for leveraging fintech innovation in order to
achieve its strategic business objectives.
Customer-centric: Focused on customers first — using customer demands, pain points and
challenges to drive technology innovation from the outside in, rather than the inside out.
Collaborative: Looks to create both internal and external relationships in order to drive its
fintech strategy and buy-in for specific initiatives. The companies work directly with partners,
fintechs, employees, regulators, industry stakeholders and others in order to ensure it is
leveraging fintech appropriately while helping to develop the broader fintech ecosystem.
Dedicated: Dedicated team for implementing fintech innovation — a team that has
developed strong, collegial relationships across all business units and departments in
the organization in order to ensure fintech is being used effectively to solve real business
problems.
Agile and adaptable: Able to make changes as required to address the challenges
associated with a constantly evolving business and fintech environment.
Outcome-oriented: Focused on outcomes, with specific plans to measure and assess the
impact of fintech innovation. At the same time, the company recognizes that ROI may take
time to achieve and so has identified a range of other measures and metrics in order to help
guide fintech-related decisions.
Willing to learn: Open to learning — not only from its own experiences, but from the
experiences of others both within and outside its industry.
Long-term and short-term focused: Able to focus on implementing the long-term,
transformative changes required to reshape the work they do and how they do it — while
also implementing the incremental changes required to respond to day-to-day challenges.
The company has found ways to ensure that any incremental changes do not go against the
guiding principles of its long-term fintech strategy.
characteristics of a fintech leader
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
10
11
Forging the future: How financial institutions are embracing fintech to evolve and grow
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Leading practices
for developing a
fintech strategy
There is no shortage of opportunity for
financial institutions to pursue fintech.
But selecting the right opportunities is
what will determine their success.
To make sure fintech opportunities
are well defined and fully aligned to
their overarching business strategy,
leading companies have established
specific fintech strategies that consider
their business objectives, customer
expectations, market position,
organizational structure and culture, the
geographies in which they operate, and
the fintech opportunities and solutions
available to them. Key elements of a
strong fintech strategy include:
Knowledge of current business
operations to fix issues and capitalize
on opportunities
Conducting a current state assessment
of existing operations is a key starting
point for financial institutions in order
to identify opportunities for change, as
well as specific operational challenges,
inefficiencies and potential roadblocks.
The current state assessment is often
the driving force behind the development
of a fintech strategy, as the ability of
fintech to help ‘bridge the gap’ is a key
measure of long-term success.
Awareness of signals of change
The scope of fintech is expansive —
from data analytics and AI to innovative
technology platforms and alternative
business models. Leading companies
stay on top of the signals of change in
the market, monitoring fintech activities
being conducted by companies both
upstream and downstream in the
value chain, by competitors and by
major technology giants like Google,
Microsoft, Amazon and Alibaba. They
inform their priorities by assessing
the certainty of a change, its potential
implications and the likely timing.
Early identification of signals of
change can help companies respond
more proactively to potential fintech
innovations rather than being forced to
be reactive.

Even if your organization
doesn’t want to be a
first mover, working to
understand the signals
of change and what
might happen just
around the corner can
help you make certain
that any investments
you make aren’t going
against the guiding
principles that will
enable your future end
state.
Mitch Siegel
National Financial Services
Strategy and Transformation
Leader, KPMG in the US
Forging the future: How financial institutions are embracing fintech to evolve and grow
12
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Ranking of fintech strategy objectives — all respondents
Enhance customer
experience
Transform current
capabilities
Deliver cost efficiencies
Protect core business
against threats
Expand into new
lines of business
Source: KPMG International global fintech survey, 2017
Develop new
quantitative investment
strategies based on AI
75%
48%
27%
22%
24%
4%
Ranking of fintech strategy objectives — by industry
Banking
Insurance
Asset management
Enhance customer experience
Transform current capabilities
Deliver cost efficiencies
Protect core business against threats
Expand into new lines of business
Develop new quantitative
investment strategies based on AI
% ranked highest importance
Source: KPMG International global fintech survey, 2017
% ranked second highest importance
75%
48%
31%
22%
23%
86%
47%
19%
26%
19%
1%
5%
67%
57%
14%
14%
33%
14%
Enhancing the
customer experience:
Driving force of
fintech initiatives
According to our survey,
enhancing the customer
experience is the most
important objective of
financial institutions that
have or are in the process
of developing fintech
strategies. Over 70 percent
of survey respondents
identified enhancing the
customer experience as
one of their two most
important objectives for
their fintech strategy.
However, as the fintech
market continues to
mature, we expect to see
increased focus on mid-
and back-office solutions
given the potential for
efficiencies in these areas.
13
Forging the future: How financial institutions are embracing fintech to evolve and grow
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.

Most financial institutions
are on a transformational
journey — a journey likely
to take multiple years
and invariably requiring
substantial investment to
reach fruition. Given the
uncertainty and speed of
change, companies will
need to complement this
agenda with an ability to
make incremental changes
much more rapidly.
It’s a journey that won’t
be completed tomorrow.
This is partly due to the
transformation of core
legacy infrastructure that
will, by necessity, come
with that change. This is
why many companies
have two streams of
innovation — one focused
on the transformation
and one focused on the
incremental changes that
will foster improvements in
the interim.
Ian Pollari
Global Co-Leader of Fintech,
KPMG International and Partner
and National Sector Leader,
Banking, KPMG Australia
Canadian Imperial Bank of
Commerce (CIBC) has partnered
with Thinking Capital, a Canadian
peer-to-peer lending platform
to provide business owners
with faster access to loans.
The solution — called rapid
financing — enables small and
mid-sized businesses to obtain
loans of between 5,000 and
300,000 Canadian dollars (CAD),
with decisions within 24 hours of
application.9
Case in point: Small
business loans
8 http://www.smh.com.au/business/nab-westpac-and-qantas-invest-in-data-republic-20160520-goznfw.html
9 https://www.cibc.com/en/small-business/loans-and-lines-of-credit/rapid-financing-powered-by-thinking-capital.html
Long-term vision
Rather than focus on individual fintech
objectives, leading financial institutions
have a big-picture vision of where they
want to be in 3 or 5 or 10 years — from the
way they work with their customers to
the efficiency of their operations. To help
achieve their vision, companies can define
and work to cultivate the organizational
characteristics most important to
differentiating themselves in the future to
ensure long-term sustainability.
Readiness for change within an
organization
The ability to gain buy-in from employees
who will be affected by specific changes
can make or break the success of a
fintech strategy. As we highlight in our
2017 US Customer Experience Excellence
Analysis report, companies must align
both the employee experience and the
customer experience — what we call the
‘spine’ of the organization. Culture is the
invisible shaping hand of organizational
change. It has the power to accelerate
or subvert change initiatives. One of the
most powerful questions an executive
team can ask is: “Does our culture
support or inhibit our strategy?” Large-
scale transformation initiatives often fail
because the people within an organization
are simply not ready for change.
Assessing the readiness for change of
both employees and the leadership team
provides impetus for a change strategy.
Companies can understand what cultural
barriers exist to change and tailor their
fintech strategy and execution in order to
help ameliorate cultural challenges and
encourage buy-in over time.
Targeted fintech strategy aligned
with business strategy
Deciding where to play and how to win
with fintech begins with a comprehensive
understanding of where a company is
today and where it wants to be in the
future, an understanding of the signals of
change and an understanding of internal
change readiness. Leading companies
use these basic building blocks to help
develop a targeted fintech strategy that is
fully aligned with their business strategy,
and which includes key metrics and
measures that will help the company
assess the impact of initiatives over time.
A continuum of fintech innovation
activities
Fintech is constantly evolving,
presenting financial institutions with
new challenges almost every day.
To deal with the nebulous nature of
Westpac (Reinventure),
National Australia Bank and
Qantas have all invested
in Sydney-based startup
Data Republic, which offers
best-practice security,
privacy compliance and
governance controls for
organizations looking to safely
exchange data.8
Case in point:
Safe data
exchange
Forging the future: How financial institutions are embracing fintech to evolve and grow
14
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fintech, leading companies look at their
innovation activities on a spectrum rather
than focusing in on individual initiatives
to the exclusion of the bigger picture. On
the one end of the spectrum are fintech
activities focused on making incremental
improvements in order to make constant
progress, while at the other end would
be transformative step changes meant
to leap a company forward.
Both types of evolution are often
required in cases where there is such a
radical change occurring in an industry.
Failure to consider innovations at both
ends of the spectrum can lead to
companies implementing incremental
changes that do not align well with
longer-term transformative change.
A flexible spectrum-based approach
can help ensure progress is made
against specific metrics (e.g. customer
satisfaction, employee satisfaction) even
while contributing to longer-term efforts.
Prioritization of initiatives
Financial institutions can’t take on every
fintech opportunity at the same time.
Prioritization is critical for companies
that want to get the most value out
of their investments and activities.
Prioritization might include evaluating
a range of factors, including the
predictability of the development, the
potential size of the impact, current
organizational capabilities and assets
and their alignment with specific
initiatives, and areas that might not
be big today but have the potential to
significantly cause change in the future.

When it comes to
encouraging fintech
innovation, the tone at the
top that is set by leadership
is absolutely fundamental —
that needs to be aligned
with how they set strategy,
and with how they measure
performance against that
strategy. Everything needs
to be aligned to drive the
most value from fintech.
Murray Raisbeck
Global Co-Leader of Fintech,
KPMG International and Partner,
Insurance
KPMG in the UK
Robo advisory provides
B2B focus for innovation
Digital and robo-advisory
fintechs have been making
big waves in terms of
establishing B2B partnerships
and relationships. One fintech
company, FutureAdvisor,
has established numerous
‘white label’ partnerships
with companies like RBC
Wealth Management, BBVA
Compass and US Bank Wealth
Management, while SigFig
is working closely with Wells
Fargo to beta test a digital
advice platform and Jemstep is
partnering with Morgan Stanley.
Most important sources of fintech innovation over
the next 3 years
Current
technology giants
People within
your company
Financial institutions
(current competitors)
Financial
institutions
(current non-
competitors)
Source: KPMG International global fintech survey, 2017
53%
72%
Fintech startups
36%
18%
20%
15
Forging the future: How financial institutions are embracing fintech to evolve and grow
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Executive leadership support and
resources
Within financial institutions, fintech
teams typically report to members of
the C-suite, signifying the importance of
fintech to business success. Given the
diverse array of challenges facing financial
institutions today, it can be easy for
companies to shift their strategic focus to
more pressing and time-sensitive issues.
This is why leadership is so critical. When
leaders understand and buy into fintech
initiatives, they will ensure the right
resources are dedicated to managing,
monitoring, measuring and reporting on
fintech innovation activities. Without the
right leadership, it can be very difficult for
companies to foster the long-term view
necessary to truly redefine a financial
institution’s activities.
In which areas of the business do fintech teams sit?
24%
Innovation
20%
Digital
18%
A line of
business
1%
Other
BU
4%
Multiple/cross-
functional
business units
(BUs)
16%
16%
Information
technology (IT)
Strategy
Source: KPMG International global fintech survey, 2017
The Commonwealth Bank of Australia acquired TYME, a South
African digital banking company. TYME has developed ‘know your
customer’ (KYC) accreditation solutions that enable customers to
open a bank account via their mobile device and open an unrestricted
bank account remotely. According to a recent report by The
Australian, South African fintech company TYME is signing up 5,000
new customers per week.10
Case in point: Account opening on a mobile device
10 https://businesstech.co.za/news/mobile/153815/sa-branchless-bank-signing-up-5000-customers-every-week/
Banks are seeing
a whole range of
new ideas and
technologies, every
day, that have the
potential to improve
the customer
experience,
strengthen
processes and drive
efficiency. The
challenge is finding
and focusing in on
the most executable
and impactful
opportunities and
structuring the
organization to
encourage continued
innovation.
Vivek Ramachandran
Global Head of Growth
and Innovation in
Commercial Banking
HSBC
Forging the future: How financial institutions are embracing fintech to evolve and grow
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Who do fintech teams report to?
Chief
Operating
Officer
Chief
Customer
Officer
Chief
Technology
Officer
Chief
Development
Officer
Chief
Marketing
Officer
Chief
Investment
Officer
Other
superior
30%
15%
15%
11%
9%
5%
4%
3%
1%
1%
0%
5%
Chief
Executive
Officer
Chief
Digital
Officer
Head of
Strategy
Chief
Innovation
Officer
Chief
Information
Officer
Source: KPMG International global fintech survey, 2017
17
Forging the future: How financial institutions are embracing fintech to evolve and grow
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Integrating
fintech
Forging the future: How financial institutions are embracing fintech to evolve and grow
18
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Envisioning the future during a time of massive transformation is a complex
process, and many end up getting bogged down in small details. Instead,
organizations should look to answer four questions as they consider their fintech
journey and develop their strategic vision for a digital future:
1. What will we be famous for?
2. What role do we want to play in our clients’ lives?
3. Where should we play?
4. How can we win?
Creating a
winning fintech
strategy and driving
profitable growth
Financial
model
Business
model
Operating
model
Impacts:
Vision for a
digital future
Higher purpose
How would you
win in selected
markets?
Where should
you play?
What will you be
famous for?
What role(s) do you
want to play in
clients’ lives?
19
Forging the future: How financial institutions are embracing fintech to evolve and grow
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Vision and financial
ambitions
Management
information and
key performance
indicator
dashboards
Financial outcomes, structuring,
investment and capital allocation
Where to play How to win
Key
strategic
considerations
KPMG 9 Levers of Value framework
‘Where to play’
Business
model

‘How to win’
Operating
model
Profitable growth Operational excellence — Target markets,
propositions, customers
and channels, including
new opportunities now
available through fintech
— Business model will drive
implications and design
of the operating model
Operationalizing business
model to deliver the
business' financial
ambitions; leveraging,
where appropriate, relevant
fintech and digital solutions
Core business
processes
Customers
and channels
Propositions
and brands
Markets
4
3
2
1
Technology and operations
infrastructure (e.g. 'fintegration')
Governance,
structure and risk
People and culture
Measures and
incentives
5
6
7
8
9
Source: KPMG International, 2017
Responding to these questions will
likely have significant implications for
the organization’s business model and
culture, and therefore for the way they
identify new fintech capabilities to
support their aspirations. Understand
that not all institutions are going to
win in the role they play today within
financial services, and that the time to
invest in significant fintech and digital
transformation opportunities is now.
Forging the future: How financial institutions are embracing fintech to evolve and grow
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© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
The startup ecosystem provides an environment where solutions can be built quicker
and cheaper, although established corporations should develop mechanisms that
allow to embed in our business the solutions that are proposed by entrepreneurs.
MAPFRE is actively pursuing opportunities in the insurtech arena by participating in
VC investment vehicles as Alma Mundi Fund.
Josep Celaya
Corporate Director of Innovation
MAPFRE
How incumbents are
responding
Financial institutions are addressing
fintech on a continuum. Some are
adopting a defensive approach, viewing
it as a means to protect what they
already have. Others are on the attack,
looking to grow. This means financial
services companies are choosing
to build fintech solutions in-house,
sourcing third-party fintech solutions,
partnering with fintech companies in
order to develop and tailor specific
solutions or acquiring fintech companies
outright to accelerate their move into
the space. There is no one right way to
proceed. Rather, financial institutions
are exploring all options along the
continuum simultaneously with an eye
to the future and business objectives.
Defend against disruption and
protect existing profit pools
Attack by growing revenues
in new and/or adjacent areas
Internal
capability
Build
Internal
Build
innovation
culture and
organizational
capabilities
(e.g. agile,
startup ready,
design)
Partnerships
Partnerships
Collaborate/
partner
New
products
and
business
model
opportunities
White-
labeling
Sell to/
through
Selling to or
through
fintech
companies
External
Investment
and
acquisitions
Invest/
acquire
Equity
stakes in
high-growth
businesses
and
acquisitions
Incumbent responses
Sourcing
Procure
Accessing a
broader
range of
external
partners/
providers
Fintech scanning — enabling and disruptive fintech, global and local
Leadership, governance and organizational structures
21
Forging the future: How financial institutions are embracing fintech to evolve and grow
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Building
The build option allows organizations
to define the scope of their innovation
initiatives, design tailor-made products
and create buy-in among users over
the course of the innovation initiative.
However, very few financial institutions
have the time, resources, capacity and
agility to be able to focus on fintech
innovation efficiently and effectively.
Internal capabilities around design,
agile ways of working and a cultural
disposition to embrace change are
required as well as core technical
competencies around data analytics
and cybersecurity that can evolve and
respond to the changing nature of the
marketplace.
Sourcing
Many fintech companies are looking
to sell or license their technologies
Accelerators
Insurance companies are more likely than their compatriots to source
opportunities through accelerators or professional consulting firms,
while asset management companies are more likely to source
opportunities through VC firms.
The development of accelerators and incubators — such as L39,
YCombinator, Startup Bootcamp, Plug and Play, and numerous others —
has proliferated in most regions of the world as cities and countries have
worked to establish themselves as fintech hubs. Traditional financial
institutions, like Barclays, Wells Fargo, MetLife and Aviva, have also
sponsored their own accelerator-type programs.
While accelerator investments may have less direct ROI for companies,
they can provide a lens into the signals of change related to fintech —
which can enable institutions to better make fintech decisions in
the future.
TD Bank recently
announced a 5-year
extension of its deal with
neobank Moven. TD’s
MySpend app leverages
Moven’s personal
financial management
tools to help users track
spending habits, receive
instant notifications
and access credit card
transaction data in real
time. TD accumulated
850,000 users in the first
9 months after launch, with
customers using the app
reducing their spending by
4 to 8 percent.11
Case in point:
Helping
consumers
spend less 
11 https://www.finextra.com/newsarticle/30347/moven-strikes-gold-with-td-bank-licensing-extension/startups
For Iccrea Banca, the investment in Satispay represents
a strategic step towards the digital transformation of our
banking group. Iccrea’s vision of ‘open banking’ aims to
create a ‘relationship hub’ where value-added services
and slick UX play a pivotal role. The focus is more on
customers and on how to maximize the value of their
trust ... not just on the banking/payment services which
are more and more becoming a commodity. To do so,
we leverage on trust, data and technology.
Antonio Galiano
Head of e-banking Gruppo Iccrea
VP of Ventis
Forging the future: How financial institutions are embracing fintech to evolve and grow
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12 http://www.goldmansachs.com/media-relations/press-releases/current/announcement-marcus-by-goldman-sachs.html
to financial institutions. The benefits
include: reduced cost of innovation and
access to established solutions, talent
and innovation capacity. However, in
order to make the most of this option,
financial institutions are evolving
their procurement processes to
accommodate taking on the capability
from small, startup fintech companies
that can help them solve problems in
specific areas.
White-labeling
For financial institutions looking
for custom solutions, there are a
growing number of fintech and other
technology companies with the
capacity to white label a product or
service for them that they can then
brand and sell. The benefits include:
prescribed costs, a diversified approach
to innovation and the ability to test
value and fill product/service gaps.
Among the key challenges are less
control than developing these products
internally, and the need to integrate
this innovation structure within the
business and to share revenue.
Acquiring
While buying or investing in fintech
companies can be an effective way
to leapfrog over the development
process by acquiring access to fintech
capabilities, financial institutions are
still working to find the best ways to
evaluate a purchase or investment.
Only 31 percent of survey participants
that plan to buy or partner with fintech
companies have a well-defined
framework for evaluating opportunities.
At the same time, 60 percent of these
companies use their internal strategy
team to source opportunities — a
strategy that may not involve a strong
due diligence process without an
objective evaluation framework.
Partnering
Over the past 2 years, there has been
a distinct trend toward collaboration
and partnership with respect to how
financial institutions approach fintech
opportunities and challenges.
The resource intensity of the build
approach and the challenges of
procurement (integration, culture
misalignment, risk management, the
time needed to achieve synergies)
are likely the reasons many financial
institutions have focused instead on a
partnership or collaboration model for
fintech innovation — a trend expected
to accelerate in the future. For good
reason: the partnership approach brings
with it a more rapid speed to market
for fintech solutions, while being
less costly and resource intensive.
Partnering also creates an opportunity
for collaboration and mutual reward. For
example, alternative lending platforms
are partnering with banks and financial
institutions and enjoying the benefits of
a cross-referral of clients.
Fifty-five percent of the financial
institutions surveyed currently partner
with fintech startups, while 38 percent
partner with non-competing financial
institutions, 32 percent partner with
scale players that are not financial
institutions and 26 percent partner with
technology giants. Just 14 percent of
survey respondents are partnering with
their competitors.
In the next 12 months, financial
institutions are looking beyond startups,
with 46 percent planning to partner with
other scale players that are not financial
institutions and 38 percent planning to
partner with non-competing financial
Goldman Sachs has launched
an online platform offering
unsecured personal loans
to consumers. Marcus by
Goldman Sachs provides
consumers with a transparent
and simple approach to
consolidate their high-interest
credit card debt. Using the
system, borrowers can apply
for fixed-rate, personal loans of
up to US$30,000.12
Case in point:
Online personal
loan platform
Yes
Somewhat
No
Source: KPMG International global fintech
survey, 2017
31%
40%
28%
Existence of framework for
vetting fintech startups
Not all startups are created equal.
Developing an evaluation framework
can help financial institutions
objectively and consistently vet fintech
opportunities to ensure they are
making the right decisions for their
organization.
23
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Strategy regarding fintech developments, in the past
and moving forward
Source: KPMG International global fintech survey, 2017
Moving forward
In the past
Partner
Build
Buy
Rent
24%
61%
50%
36%
Partner
Build
Buy
Rent
81%
52%
33% 37%
Fintegration
/fɪntɪˈɡreɪʃ(ə)n/
noun
1. The process whereby traditional financial institutions partner with
fintech companies in order to gain the ability to integrate innovative
solutions within their own enterprises.
institutions. Only 18 percent plan to
focus on potential partnerships with
competitors.
Long-term, two-thirds of respondents
do not expect to partner with
competing financial institutions — a
view that could limit their options.
There are a number of fintech-related
developments that would benefit from
collaboration across competitors, such
as blockchain, which would require
consistent rules across organizations in
order to implement on a large scale.
When looking
to partner with
or invest in a
fintech company,
we consider the
following key
factors: market
share, payback
period, internal
rate of return
(IRR), ability
to cross sell,
distribution,
social impact,
transformation,
mindset, skills
and collaboration
maturity.
Bruce Adrain
Head — Innovation
Capability Build at
Liberty Group
South Africa
Forging the future: How financial institutions are embracing fintech to evolve and grow
24
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Taking advantage of scaled players
In June 2017, National Australia Bank and realestate.com — a
long-established fintech company that has become one of
Australia’s leading property search companies — announced a
strategic mortgage brokering partnership in order to create an
end-to-end digital property search and financing experience for
customers focused on enhancing the customer experience and
making the home lending process more seamless.
Who are financial institutions partnering with? —
all respondents
Fintech
startups
Financial
institutions
(non-competing)
Other scale
players
(non-financial
institutions)
Technology
giants
Financial
institutions
(competing)
Note: Charts may not add to 100% due to rounding.
Source: KPMG International global fintech survey, 2017
Neither currently partner nor plan to partner in the next 12 months
Plan to partner in the next 12 months
Currently partner
24%
38%
38%
22%
46%
32%
46%
27%
26%
68%
18%
14%
18%
26%
55%

While regulation might
be a roadblock to
innovation, regulators
can be a major supporter
of it. Whether it’s the
Office of the Controller
in the US, the FCA or
PRA in the UK or the
MAS in Singapore —
some regulators are
looking at how they
can change regulations
to make it easier for
financial institutions to
get aid from fintechs
and to help give fintechs
an environment in
which they can thrive.
They’ve realized
that fintech brings
improved customer
experience, improved
customer outcomes,
more transparency in
financial services and
more competition —
and those are all things
that, post financial
crisis, the regulators
are really, really keen to
encourage.
Murray Raisbeck
Global Co-Leader of
Fintech, KPMG International
and Partner, Insurance
KPMG in the UK
25
Forging the future: How financial institutions are embracing fintech to evolve and grow
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Five key attributes of an effective partnership
While partnering offers numerous
benefits, including access to talent,
enablement of a portfolio approach
and increased speed to market, it
is not a straightforward process.
Organizations that have established
partnerships have found themselves
mired in roadblocks, from lacking
the application program interfaces
(APIs) required to enable seamless
integration to the time-consuming
process of establishing governance
structures and risk management
processes. Without strong guiding
principles and a strategy for managing
partnerships, it is highly unlikely that
financial institutions will be able to
achieve the full value that working
with fintech companies can provide.
Developing fintech partnerships
requires a significant amount of time
and effort on the part of financial
institutions — both to identify the
right fintech companies with whom
to partner, and to ensure the resulting
partnership is structured so that both
parties can achieve their desired
objectives. Looking at how leading
companies approach partnerships, five
key themes emerge. These include:
13 NEWSWIRE: CIBC forms strategic alliance with National Australia Bank and Bank Leumi.
Source: KPMG International, 2017
Focus: Leading companies know what goals they want to achieve or issues they want to address through
fintech and potential partnerships with fintech companies. When looking for opportunities, leading
financial institutions start with the problem rather than the technology to ensure there is demand for a
solution and that any solution provides the required value. Before attempting to ‘plug and play’ a fintech
solution or partner into their organization’s operations, they work to ensure activities are well aligned in
order to reduce integration challenges.
Evaluation framework for fintechs: Creating and using strong evaluation frameworks are an important
part of ensuring that any fintech partnerships are well positioned to achieve specific outcomes. Leading
companies use frameworks aligned to their business strategy, specific pain points and desired outcomes,
in addition to the specific characteristics of the fintechs being evaluated (e.g. the quality of the fintech
company’s management team, the alignment of its strategic objectives with your own, its technology
capacity, the scalability of technology solutions, potential integration challenges and cultural differences).
A global mindset: Fintech innovation is evolving in unique ways in many different geographies as a
result of their unique skills bases, innovation centers, government priorities and collaborations. Leading
companies often have a presence in key fintech ecosystems in order to stay on top of signals of change
and to help identify potential partners from outside their local jurisdictions. For example, Canada’s CIBC,
the National Australia Bank and Bank Leumi of Israel have formed an alliance in order to leverage joint
innovation to improve the customer experience for all three banks. CIBC and the National Australia Bank
have also partnered on a blockchain project.13
Experienced advisors: When it comes to identifying and establishing partnerships, many leading
companies have a network of advisors who can supplement their existing skill sets and provide assistance
with both evaluating partnership opportunities and with managing the legal and risk management issues
that might arise during the development and execution of any partnership arrangements.
Outside the box thinking: In today’s constantly evolving fintech environment, effective partnerships
can be established with a variety of different organizations, from fintech startups and technology giants
to companies in ancillary industries, to actual business competitors. Leading companies look beyond
traditional boundaries to form partnerships, forging alliances with companies well beyond their own sector
in order to leverage insights, solutions and opportunities.
1.
2.
3.
4.
5.
Forging the future: How financial institutions are embracing fintech to evolve and grow
26
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Focusing on front
office and back office
Over the past few years, two-thirds
of financial institutions have focused
their fintech initiatives on solving
front-office, customer-facing issues,
while 25 percent have focused on
improving back-office effectiveness
and efficiencies. Given the number
of customer pain points related to
financial services, this focus comes
as no surprise. Customer-facing
initiatives are expected to remain high
on the innovation agenda of financial
institutions in the future.
However, the value of fintech driven
improvements to the back office can’t
be understated. “Technologies like
cloud computing, blockchain, robotics
and cognitive learning are all helping to
deliver a step change, in the cost base
of banks,” explains Ian Pollari, Global Co-
Leader of Fintech, KPMG International
and Partner and National Sector Leader,
Banking, KPMG Australia. “In a low-
growth environment, these types of
changes will become more and more
important.”
As back-office focused fintech matures,
we’ll see even more companies taking a
holistic approach in order to ensure they
are not missing some of the broader
benefits that fintech provides.
The value of industry
partnerships
and consortia
While financial institutions
should focus primarily on
developing partnerships
with fintechs and other tech
companies that will help
them achieve long-term
value, there is also value
in forming less traditional
partnerships given the
evolving nature of the
fintech industry.
In order for certain fintech
technologies to succeed,
close collaboration across
industries and between
industries and regulators
can be critical. Blockchain
is a prime example of
just such a technology.
According to Eammon
Maguire, Global Lead,
Digital Ledger Services, and
Advisory Director, KPMG
in the US: “Blockchain
requires a fundamental
shift in thinking in terms
of how accounting has
been conducted for over a
century — not just within
a company, but across
companies, industries and
regulators.”
To be able to create a
framework in which
blockchain can be effective,
companies within an
industry need to work
together to develop
protocols for blockchain
solutions. This is why
industry consortia such as
R3 in Banking and B3i in
Insurance have appeared —
to help consolidate efforts
with respect to the
evolution of blockchain.
Past 3 years
Middle office
Back office
Middle office
Back office
Next 3 years
Focus of fintech investment, past and future —
all respondents
12%
25%
Source: KPMG International global fintech survey, 2017
19%
9%
Customer-facing
66%
Customer-facing
69%
27
Forging the future: How financial institutions are embracing fintech to evolve and grow
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Most exciting fintech technologies over the next 3 years
When it comes to the next 3 years, technologies related to data analytics and big data are expected to
attract the most attention from survey respondents. Seventy-six percent of insurers, 65 percent of banks
and 58 percent of asset management companies ranked data analytics as one of their top two emerging
fintech technologies of most interest, while API technologies and robotics/robo advisors also ranked high
in this area. Not surprisingly, as a result of changes associated with PSD2 and other similar open banking
regimes, banks are the most interested in APIs, with 60 percent noting it as a top area of interest.
While blockchain has received a significant amount of attention over the past 12 months, looking forward,
it was only ranked as a significantly high technology of interest for companies in the asset management
space — where 35 percent ranked it as a key area of interest.
Thirty-six percent of asset management companies also ranked AI as a top technology of interest, as did
almost one-quarter of insurance companies. Insurers, meanwhile, showed a much stronger interest in
technologies related to IoT than either banks or asset management companies.
Insurers are more interested in IoT because of the value of gathered data in providing more bespoke
underwriting, pricing and propositions to customers. Connectivity allows insurers to become risk partners
with their clients, protecting them through the prevention of accidents and potential issue notification,
rather than simply providing protection after the event in the form of a claim.
Emerging fintech technologies of most interest, next
3 years — all respondents
Analytics
and
big data
API
Robotics/
robo-advisors
AI
Blockchain
IoT
% ranked highest in interest
% ranked second highest in interest
Source: KPMG International global fintech survey, 2017
67%
55%
24%
24%
16%
14%

Insurance companies
that want to know more
and understand the
innovations coming 5
years down the road
are the ones utilizing VC
investments. Meanwhile,
the ones that want to
address pain points,
make big gains and
scale right now are
forging partnerships. The
result is a development
of relationships with
established tech
firms — like Amazon,
Google and platform-
based businesses.
Matthew Smith
Partner,
Global Strategy Group,
Insurance Sector Lead
KPMG in the UK
Forging the future: How financial institutions are embracing fintech to evolve and grow
28
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Finding the needle in the haystack
KPMG recently acquired Matchi, a leading global fintech innovation and matchmaking platform that connects financial
institutions with leading-edge financial services technology solutions and companies worldwide. Matchi’s database
includes over 3,500 fintech solutions.
Using the Matchi platform, financial institutions are able to search for a specific company or solution, or they can use
the platform’s proprietary ‘Innovation Challenge’ capability to present specific problem statements to the global fintech
market and receive recommendations on solutions from fintech innovators.
In this way, financial institutions are able to access and unlock the leading-edge technology and deep customer insight
of the world’s best fintech firms for their own operations. The need for a strong evaluation framework for fintechs was
discussed earlier in this report. The team at Matchi have had to come up with a set of criteria they assess when vetting a
fintech company. Some of the items they look at include:
Innovation Challenges and scans help to quickly source qualified fintech solutions
aligned to strategic focus areas — either to resolve issues or capitalize on opportunities
Innovation
Challenge
definition and
design
Global
marketing and
targeted
scouting
Validating
and
shortlisting
solutions
Final
adjudication
and selection
for proof of
concept (PoC)
2–3
weeks
3
weeks
1
week
2–3
weeks
The problem is not finding fintech solutions — it’s finding the
right solutions, aligned to the needs of the client organization.
Matchi Challenges cut through the clutter, helping you to find
vetted, high-quality solutions.
Matchi does this in a way that helps to build support for
innovation with key stakeholders, while increasing speed to
market via our proven approach.
For more information, contact us or visit matchi.biz.
performance metrics such as number of users/
transactions (depending on the nature of the
solution)
balance of technology staff within total headcount
the top three client benefits
provided by the solution
founders’ professional experience.
current and past clients
29
Forging the future: How financial institutions are embracing fintech to evolve and grow
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
The road
ahead
Forging the future: How financial institutions are embracing fintech to evolve and grow
30
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
The past 5 years have introduced a
level of disruption never experienced
before. The ability of emerging fintech
companies to quickly gain traction in
the global financial services market is
forcing financial institutions to evolve to
remain competitive. They must adopt
the customer-centered innovations and
back-office solutions that will help them
provide a more tailored, value-added
customer experience.
New competitors (both in the shape
of fintech startups and technology
giants responding to opportunities to
add value) as well as new solutions
are catalysts for change in an industry
long defined by tradition. From AI,
automation and augmented reality to
the cloud, IoT and data analytics, fintech
is transforming the financial services’
status quo.
Financial institutions that take the time
to define their fintech strategy and align
it to their business goals will be best
positioned to help forge the future of
financial services.
At the rapid rate the industry is evolving, financial products and
services — and the technological infrastructure underpinning
financial institutions — will look remarkably different in a
decade compared to how they look today.
As you consider how best to leverage fintech to forge your own
path forward, ask yourself:
1. What will we be famous for?
2. What role do we want to play in our clients’ lives?
3. Where should we play?
4. How can we win?
31
Forging the future: How financial institutions are embracing fintech to evolve and grow
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated.
Ian Pollari
Global Co-Leader of Fintech,
KPMG International and Partner and
National Sector Leader, Banking
KPMG Australia
E: ipollari@kpmg.com.au
Murray Raisbeck
Global Co-Leader of Fintech,
KPMG International and
Partner, Insurance
KPMG in the UK
E: murray.raisbeck@kpmg.co.uk
Judd Caplain
Global Head of Banking,
KPMG International and
Financial Services Advisory Partner
KPMG in the US
E: jcaplain@kpmg.com
Tom Brown
Global and UK Head of Asset
Management, KPMG International and
Partner, Asset Management
KPMG in the UK
E: tom.brown@kpmg.co.uk
Laura Hay
Global Head of Insurance,
KPMG International and
Amercias Coordinating Partner
KPMG in the US
E: ljhay@kpmg.com
Matthew Smith
Partner,
Global Strategy Group,
Insurance Sector Lead
KPMG in the UK
E: matthewg.smith@kpmg.co.uk
Mitch Siegel
National Financial Services
Strategy and Transformation Leader
KPMG in the US
E: msiegel@kpmg.com
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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with
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Publication name: Forging the future: How financial institutions are embracing fintech to evolve and grow
Publication number: 134852-G
Publication date: November 2017
Contacts
kpmg.com/socialmedia
About KPMG International’s global fintech survey, 2017
In order to provide financial institutions with deeper insights into fintech strategies and priorities
across the industry, KPMG conducted an online survey of fintech decision makers from financial
institutions around the world in spring 2017. The 168 respondents represented companies based
in 36 countries. To supplement the results of the survey, KPMG conducted in-depth interviews
with senior executives from leading financial institutions and our own financial services and fintech
leaders from around the world.
About KPMG’s Global Fintech practice
Through working with emerging fintechs through over 35 fintech hubs worldwide, our Fintech
professionals bring global insight and capabilities in digital, payments and innovative technologies
to various financial institutions, helping them fully realize the potential of fintech and create
business models that enhance bottom line performance, meet customer demands and gain
competitive edge.