Page 103 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) .indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
th
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Similarities between Fintech and Banks: local banking industry.
Both aim at providing consumers with seamless Fintech Companies and start-ups should not be
financial services
considered as a “disruptive force” but rather a
Difference between Fintech and Banks: new rival in the delivery of financial services.
 Defi nition: Fintech is a new technology So we can say that “Fintech complements
that automates and improves the delivery rather than threatens Banking Institutions.”
of financial services. While Banks refer to A credit report is a document that contains
financial institutions that are licensed to basic credit information on a borrower from
accept deposits from customers and make
which banks and other lending institutions may
loans.
gauge the creditworthiness of the individual or
 Purpose: While fintech companies focus institution that wishes to borrow money from
on making the customer experience them.
seamless through convenience, While Fintech companies and start-ups will
functionality, personalization and
be able to provide local banks with innovative
accessibility, banks focus on security and ways of distributing their financial products
the management of financial risks.
and services, credit reports from the CIC will
 Structure: Fintech has organizational help banks and other lending institutions
structures with fewer barriers to trends evaluate borrowers through their credit report
which encourages innovation. On which would be cost-effective and time-wise.
the other hand, banks have a rigid Importance of Fintech:
organizational structure that may restrict
Fintech reduces overall transaction costs. The
quick rolling of innovation changes.
high use of digital payments has resulted in a
 Reliance: While fintech companies rely small effect in GDP and job creation. Fintech
heavily on technology, banks do not rely innovation around digital payments reduces
heavily on technology advancements. costs and expands access for new customers-
individuals and merchants- to payment means.
 Collateral: Fintech has lenient and
flexible collateral requirements. On the Fintech is shaping the Future of Banks:
other hand, banks have strict collateral With the globalization of the world economy,
requirements. which has already restructured the way
businesses were conceived, Fintech is
Fintech as complement to Baking Sector: relentlessly striving to make it even better
Financial Technology (Fin Tech) should be by means of automatizing the delivery and
viewed as a complement rather than a threat
utilization of financial services through
to local banks according to HSBC Philippines technology. With the rapid increase in the
President and CEO Jose Arnulfo "Wick" Veloso.
digitization, technologies have certainly gained
Although the emergence of Fin Tech has put the upper hand in the global market segment
a pressure on banks in terms of delivery of to influence everything it deems fit. For
financial services, President Veloso said that instance, Fintech is being massively employed
this innovation will lead to an evolution of the to help the diverse sectors of the economy, and

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