Qatar’s expected introduction of key fintech regulations will “further facilitate the buildup” of the digital banking ecosystem, KPMG has said in a report.
The Qatar Central Bank’s establishment of the fintech section, Fintech Regulatory Sandbox and the launch of the Qatar FinTech Hub (QFTH); the fintech scene in Qatar is expected to grow rapidly and start disrupting the banking sector, KPMG said in its "Qatar Banking Perspectives 2020".
“Local banks need to make the prudent decision to collaborate with fintech firms rather than see them as a threat and trying to fight them off,” KPMG said in its report on "Technology and Innovation" authored by Suhail Shaker (Digital and Innovation Advisory).
“The sooner banks can see fintech firms as their ally rather than competition, the sooner they will be able to confidently embark on the banking of the future journey together. Otherwise, traditional banks risk losing their customers and current market position to the new agile, efficient and creative competitors,” it said.
Fintech, KPMG noted, has become “popular” in the recent years, with the advent of internet banking, mobile banking and the new means of digital payments and e-wallets. Fintech has come a long way in the recent years, thanks to the new technology developments and healthy VC (venture capitalist) appetite. The fintech sector has grown to become a true disruptive force.
“Today, the influence of fintech can be felt in the banking sector and capital markets. Fintech has a huge impact on customer expectations, operational efficiencies, banking market structure, banking strategies and their financial stability,” KPMG noted.
Fintech is affecting all banking functions, such as front-, middle and back-office functions by introducing new and different technologies to enhance customer experience, complying and responding to regulatory change, introducing new payments and digital delivery models, providing faster service delivery and more cost effective, and improving efficiencies in back-office functions.
Banks with their traditional business models, legacy systems and process inefficiencies are now challenged not only by the advent of fintech companies, but also by new disruptive entrants to the market: Technology companies, telcos, global retailers and postal service companies, who are benefiting from technology developments and regulatory changes that are allowing them to provide financial services. Banks can no longer dismiss those new contenders nor remain oblivious to the rapid changes happening around them in the fintech world.
They need to ride the wave and embrace new fintech strategies that can help them enhance their overall customer experience, increase process efficiencies and comply with the ever-changing regulations.
“The banking sector in Qatar needs to ride the technology wave and embrace new fintech strategies that can help them enhance their overall customer experience, increase process efficiencies and comply with the ever-changing regulations,” KPMG said.
