Aug 10, 2020

PwC: How fintech is transforming FS and TMT firms

Technology
Fintech
PwC
Georgia Wilson
3 min
Fintech
Business Chief EMEA gains insight from PwC on how the fintech industry is transforming financial services, technology, media and telecommunications...

What is fintech?

“Fintech is a combination of technology and financial services that’s transforming the way financial businesses operate, collaborate, and transact with their customers, their regulators, and others in the industry,” commented PwC .

In the last decade alone organisations have been harnessing cutting edge technologies within the fintech space, with many evolving to be tailored for specific functions within the ecosystem including regtech and insurtech.

The current landscape

“Emerging technologies have given companies a low-cost way to create convenient, personalised, data-intuitive products and services,” added PwC. “Fintech has also lowered the barriers to entry for firms — from established FS groups to startups to TMT entrants — and has therefore created a complex web of cooperative competition, or ‘coopetition,’ and collision.”

In a recent survey conducted by PwC the company discovered that while financial services (FS) and Technology, Media and Telecommunications (TMT) firms have different ideas when it comes to driving change with FinTech, both sectors have similar challenges when it comes to digital transformation strategies.

One key finding within PwC’s report included, more than half of FS leaders believing that artificial intelligence (AI) will be the biggest driver of change when it comes to the delivery of financial services in the next two years, while TMT executives believe that the internet of things (IoT) will be a game changer.

“In an era of increased focus on data, hyper-personalisation and ‘always-on’ connectivity, it’s unsurprising that AI and IoT top the list. But our survey highlights recurring challenges and concerns in implementing these technologies, including long delays in developing market-ready products and services, and difficulties managing regulation, safeguarding data and earning customers’ trust. In asset and wealth management (AWM),” commented PwC, who discovered that only 30% of insurers in its survey think IoT will be transformational, even though there is high potential for insurers to use the technology to make risk management more proactive and develop new business models.

Other key findings from the report included:

  • 47% of TMT and 48% of FS organisations have fully adopted fintech into their strategic operating model
  • 44% of TMT and 37% of FS organisations have incorporated emerging technologies into their products and services 
  • Those that engage with fintechs are more likely than those who haven’t to be confident about their future revenue growth and competitive edge
  • FS executives believe that harnessing fintech will improve the ease and speed of their services which will be key to retaining customers, while TMT leaders see personalisation as the key to keeping customers
  • 80% of TMT and 75% of FS organisations are developing jobs related to fintech, however 42% of TMT and FS organisations are struggling to fill these types of role
  • 78% of TMT and 76% of FS firms are targeting businesses within their own sectors when it comes to acquisitions, strategic alliances or joint ventures , while 44% of TMT and 47% of FS organisations are targeting a company that specialise in fintech.

For more information on business topics in Europe, Middle East and Africa please take a look at the latest edition of Business Chief EMEA.

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Jun 8, 2021

UK office space slashed as hybrid working looks set to stay

offices
hybridworking
realestate
PwC
Kate Birch
3 min
As more UK firms announce a hybrid way of working, new research suggests a third of businesses will reduce their office footprint by more than 30%

With hybrid predicted to be the working model of the future, and businesses both large and small announcing that WFH will continue for employees into the future, the traditional office space is being re-thought.

Businesses are both questioning how much space they need for a hybrid working future, especially if it means they can potentially save money, and what form that space should take.

UK firms slashing office space

Back as early as February, HSBC – whose real estate footprint currently stretches to around 112 football pitches worldwide – said it would be cutting its post-COVID office space by half globally and by 40% in London over the next few years, as it looks to implementation of a hybrid working model in light of the pandemic.

Lloyds Bank followed suit. Following an internal survey where 77% of employees said they wanted to continue to work for 3+ days a week post-pandemic, the bank announced it was also moving to a hybrid model, and so looking to cut its office space by 20% over the next two years.

In fact, the latest research from consulting firm PwC reveals that a third of organisations surveyed (258 of the UK’s largest companies) believe they will reduce their office footprint by more than 30%.

The findings of PwC’s Occupier Survey indicate there is likely to be a sizeable fall in occupied office space with half of executives surveyed saying that despite taking into account mass vaccinations, employees will continue to work virtually 2-3 days a week.

And companies continue to announce the hybrid working model for their employees. Accountancy firm EY has just announced that its 17,000 employees are moving to a hybrid way of working, WFH for at least two days a week. This follows PwC which in March said workers could stay at home for half the time and KPMG which this month said it would expect employees to only work two days in the office every week.

More collaborative work spaces

However, what’s also clear from PwC’s research is that the role of the office is not going to disappear completely, but instead adapt to a new way of working, with half of all organisations with more than 100 employees saying they have a real estate and workplace strategy that considers the long-term impact of COVID-19.

“We may see an increased demand for flexible space as many businesses operating models may well need that option if holding dead space is to be avoided,” says Angus Johnson, UK Real Estate Leader at PwC UK.

According to the survey, more than three quarters of respondents said they are likely to reconfigure existing office with 43% of financial services firms stating that they are extremely likely to do so as a result of the pandemic.

“It’s also clear that the nature and purpose of office space is going to change. As occupiers seek new, different space to meet their accommodation needs, environmental aspects will be increasingly important. If the real estate sector is to truly succeed as a more dynamic, greener industry it’s imperative that creative thinking comes to the fore.”

And companies are already thinking creatively how they can utilise office space in a hybrid future. So while HSBC is cutting a significant amount of office space, it is not downsizing its prestigious Canary Wharf headquarters, and instead reimagining the space. In April, CEO Noel Quinn announced the firm was embracing an open plan floor, with no designated desks or private offices, and instead using hot-desks in line with the future hybrid working style. “My leadership team and I have moved to a fully open-plan floor of the building in east London with no designated desks,” he said on LinkedIn.

Lloyds also reported it was adapting its office space, so that rather than individual offices, it will have a more collaborative workspace. And just last month, KPMG announced it too was ditching desks and individual offices, and replacing them with meeting rooms and conference halls for a more collaborative workspace.

 

 

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