Breaking the balance sheet

Digitalization and rapid technological innovation has been disrupting the Financial Services industry over the last few years. Complex regulatory and legal environments initially helped delay this disruption. However, the 2008 financial crisis saw the onset of a number of key trends (e.g. increased regulation, banks’ withdrawal from certain segments of the market, the arrival of “big-data”, etc) that have subsequently underpinned the expansion of technology-enabled financial services providers – or “Fintech” firms – offering alternative products and services that increasingly compete with traditional bank offerings.

The disintermediation of financial services is a phenomenon that has – or is starting to – affect the entire suite of products and services in banking. However, the immediate impact has been most heavily felt in areas of the banking value chain that benefit from the automation and simplification of
high-volume processes.

Our goal in this paper is to:

• Develop insights into how emerging Fintech players in developed markets are disrupting core banking services;
• Assess how likely these business models are likely to transition to key emerging markets and;
• Understand what the implications are for banks in emerging markets.