Chatbots went from novelty to mainstream in 2016.
From a mere focus on customer payments, the fintech market has now rapidly evolved into a growing web of services that includes blockchain, new digital lending, telematics, and next-generation trade finance. In Asia, it has been taking off with megadeals upwards of $300m and an expanding B2C fintech in China, amongst other bright spots in the region.
“2016 was the year fintech went mainstream,” says Henri Arslanian, PwC’s fintech and regtech lead for China and Hong Kong.
“Chatbots, which mimic human conversations in apps such as Facebook Messenger and WeChat, went from novelty to mainstream in 2016. Several customer-facing chatbot applications are now being tested for uses ranging from retail banking to insurance claims. Expect many more of these to be pilotted and rolled out in 2017, as chatbots start to become part of our everyday lives,” says Arslanian, adding that the largest tech firms in Asia, such as Tencent and Ant Financial, will continue to push into financial services in 2017.
Miklos Dietz, senior partner of McKinsey and Company, says that as the industry evolves, it will play a role well beyond financial products and services. Dietz adds that individual companies will vie to become undisputed leaders by size and breadth, and ecosystems will develop that have a tight grip on customer loyalty. The banking industry definitely feels the pinch as fintechs continue to dominate the payments space, leading bankers to consider collaboration as still the key to keeping their customers and their revenues. After all, fintechs admit that they still rely heavily on the traditional infrastructures and the institutional memory of banks.
“Whilst fintechs have developed applications that create improved customer experiences, many lack skills in customer acquisition and other fields needed to grow quickly. Incumbent banks, on the other hand, already have hard-won capabilities in these areas, but they will have to work harder to create a true digital enterprise,” says Dietz.
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