NEW YORK: HSBC’s retail banking and wealth management head John Flint expects banks to partner more with financial technology (fintech) companies in the coming years to help meet changing demands from customers.
Banks are increasingly teaming up with fintech companies, previously seen a threat, as they look to respond to a sharp increase in customers banking online and to take advantage of opportunities created by new technologies such as blockchain.
“I think there’s an awful lot of scope for collaboration,” Flint said in an interview at the Toronto Global Forum on Monday.
The HSBC executive said that, when visiting Davos for the World Economic Forum five years ago, he had been struck by how hostile and dismissive fintech entrepreneurs were toward established banks but noted that the dialogue had since changed.
“There’s mutual respect on both sides. If you look at smaller fintech firms, you can see that banks are partnering with them and that benefits both stakeholders’ needs,” he said.
HSBC, itself, has set aside $200 million to invest in tech start-ups.
Flint said Apple Pay was “both a threat and an opportunity”.
“We partner with Apple in every market that they want to be in. They’ve provided a technology platform and payment experience which our customers want. They extract a rent from us but we can do more business,” he said.
Flint said banks had fallen behind other industries in embracing new technology, with their attentions dominated by repairing balance sheets and meeting tougher regulatory requirements in the aftermath of the 2007-09 financial crisis.
“I think we probably have but it’s because we’ve been a bit distracted. The industry pretty much failed and then we’ve been in remediation mode and fix mode ever since,” he said.
“It feels like our industry has woken up to the possibilities of new technology really in the last three or four years,” he added. “If there hadn’t been a crisis, I’m sure we would all have started thinking about it a lot earlier.”
Flint said the full implications of Britain’s vote to leave the European Union had yet to become clear.
“I don’t think any of us really know. Everything is uncertain,” he said.
However, he added that HSBC was sticking by the decision that it made in February to stay headquartered in the UK despite the outcome of the vote.