In a two-part interview feature with Liew Nam Soon, Managing Partner for Financial Services ASEAN, we get a deep-dive into the latest insights around the role of fintechs.
Liew Nam Soon, how is fintech shaping the financial services industry?
Fintech is shaping and changing the financial servcies industry in a few ways. Firstly, fintech is clearly providing institutions with new ways to get access to customers and improve on their customer acquisition strategies. It also reaches out to what previously had been the under-served, unbanked and even uninsured population.
In Indonesia for example our report on «The future of banking in emerging markets» indicates that 80 percent or more of the population don’t have a bank account and wouldn’t have been able to access financial services if not for mobile telecom operators who have tied up with fintechs to offer a service that enables them to open a bank account in a few simple steps.
«A lot of fintechs are making the processing alot more efficient through automation»
Other examples are in China where firms like Alipay or Alibaba are offering even broader services not only for the consumers‘ financial needs, but for their lifestyle purposes, which includes purchasing of travel tickets or accomodations.
I think this development is the biggest disruption happening right now – how customers are acquired and served, which goes to show that collaborating with fintechs offers many new possibilities for the financial industry.
Another area of disruption is around operational efficiency and how operating models have been disrupted. A good example is around blockchain and robotics or Robotics Process Automation (RPA). A lot of fintechs are making the processing alot more efficient through automation. This raises the quality and reduces the need for manual intervention and likelihood of human errors. Overall, this brings about time savings and a lowered cost to serve.
«We are constantly striving for greater value for our clients in the things we do»
The third area of disruption is in respect to compliance, for example how regtech is helping with automating and embbeding analytics into the KYC or AML processes to address financial crime and look at areas like trade survellience. This helps the compliance units in insitutions to identify risks and areas of non-compliance, which is crucial as well to protect the institutions from financial or reputational loss.
Does this mean that fintech serves more of the basic financial needs and transactions?
It depends largely on the type of business. For example, for small medium enterprises, alot of them find it more challenging to get credit from banks and fintechs are able to help circumvent this challenge for them. In other cases like robo advice in the wealth management space however, fintech goes beyond just serving the basic need to providing value-added services based on data-driven analytics to get better customer insights. This will in turn enable institutions to provide more tailored advice to their customers.
Is EY active in all these three fields of disruptions mentioned above?
We are constantly striving for greater value for our clients in the things we do. We have strong capabilities around helping institutions with their customer acquisition and operating models by reviewing and revamping the overall process and/or platform to make it more efficient, which in turn helps with cost savings.
«We have helped some fintechs to go for IPO by determining their valuation»
We also have a suite of capabilities around robotics and blockchain. For example, we are helping some major financial institutions to implement robotics in their back offices, in finance, operations or compliance.
How then is EY getting disrupted by the fintechs?
To a certain extent as with robotics and automation enablers, we have robots doing certain maunal roles like tax filing and basic account reviews. This gives us an opportunity to develop the skills and experience of our employees by deploying them to perform other more strategic roles instead.
How does EY collaborate with fintechs?
We have been doing so in a few ways. For example, we have helped some fintechs to go for IPO by determining their valuation, validating their technology platforms and evaluating whether they are compliant with the regulations by the respective regulatory bodies. In other areas, we are also working with fintechs and their clients to look at the deployment opportunity, operating model, disruption points in the value chain and the ideal customer or user journey that needs to be in place.
«This is a testament of our global network and multi-faceted capabilities»
In addition, we also have fintech labs all around the world where we can identify certain fintechs that we think are the most value-adding to our clients. In such instances, we would then be the bridge between the high potential fintechs and the clients by bringing them together for collaboration purposes.
We would then be involved in relation to their target operating model, funding, valuation or even tax considerations for jurisdictions, which give tax credits for the creation of intellectual property. This is a testament of our global network and multi-faceted capabilities, where we have resources in all areas and markets to help our clients.
Liew Nam Soon has 24 years of consulting and industry experience. He has worked in industries including retail, private and investment banking, asset management, corporate banking, life insurance and private equity. Prior to joining EY, he was the Chief Transformation Officer of a global insurer and a partner with the global business services unit of IBM. He was also previously a partner with PwC and started his career with Andersen Consulting.
Nam Soon graduated with an MBA from Imperial College, London, and a Honors in Bachelor of Engineering from Nanyang Technological University of Singapore.
