In the wake of global digitization, banking sectors are resorting to their in-house technological innovation to cater to customer’s quest for digital transactions. This has led to dwindling dependence on the fintech companies; thereby, curtailing their marketing scopes. On the other hand, the fintech companies are forced to allocate more investments and resources to augment their product portfolio. However, the actual product performance in the market fails to compensate for this product innovation investment subsequently resulting in severe market share loss for these companies. Moreover, fintech companies are relatively new in the market and do not have in-depth information on the regulators and governing bodies they should pledge their adherence to. This lack of information leads to the delay in obtaining a license and increases the possibility of these companies being slapped with hefty fines.
- The client: One of the leading player in the fintech companies market
The client- one of the reputed fintech companies approached Infiniti to conduct a market share analysis to gain meaningful insights into their current market position in the global fintech industry space. Additionally, they wanted to gain insights into their growth rate, profitability, cost structure, and distribution channels across the industry. The market share analysis engagement was also expected to help target customer base and consequently lead to optimal investment return and a maximized EBITDA margin.
How Can Market Share Analysis Help Fintech Companies?
Infiniti’s market share analysis solution helps fintech companies to stay abreast of the critical market scenario and keeps them informed about their current market position. These factors are imperative for an undisruptive growth of the fintech companies. The market share analysis also helps companies explore the brand reputation and accordingly make adjustments to the brand needs. In addition to this, a robust market share analysis solution highlights the performance benchmarks to evaluate the brand goal progress in the future.
Summary of Our Fintech Company Market Share Analysis
Infiniti Research undertook comprehensive primary and secondary research methods while conducting the market share analysis. The research involved interviews and discussions with stakeholders in the fintech industry space. Infiniti’s market share analysis experts also analyzed the inputs gathered from a vast array of resources such as company presentations, industry forums, and paid industry databases. This offered the client a comprehensive overview of the latest fintech industry trends.
Solution Benefits and Business Impact
This market share analysis engagement from Infiniti helped the client gain real-time insights into their market position that also highlighted the advantages and disadvantages that they possess when compared to their peers in the fintech industry space. The solution also helped the client understand customer interests and accordingly target their consumer base. The client was also able to design a progressive and predictive market strategy which helped them gain an edge in the competitive fintech companies market.
Fintech Companies Future
The emergence and thriving of the fintech companies is an inevitable phenomenon in the age of digitalization. A phenomenon which is gradually becoming the podium of all financial transactions. As convenience and accuracy are some of the benefits offered by fintech companies, customers are now more inclined toward fintech based transactions. Additionally, major financial institutions are forming partnerships with the fintech companies to augment their operational efficiency and respond to customer demands. Furthermore, it can be safely said that the fintech companies will grow in tandem with the advancement of technologies.
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Currently, there is a very limited base of users who prefer digital currency. The framework for its regulation and the tax structure to regulate digital currency is still evolving. It has two categories, namely cryptocurrencies and virtual currencies. Digital currency facilitates direct payments between payees and payors and removes intermediaries, infrastructure costs, and processing costs. It also facilitates the easy and transparent flow of funds. But before moving ahead, let’s understand what is digital currency in simple terms.
What is Digital Currency?
A payment method which exists only in the electronic form is called digital currency. Digital money has many benefits associated with it, such as easy and timely payments and lesser transaction costs. It can also help companies in the financial industry to eliminate the risk of exposure since they are highly secure. But the acceptance of this currency by the financial industry is limited due to risk factors such as volatility of currency, identification of payment beneficiary, regulatory compliance, and transaction risks. Here is the list of the top four digital currency that will have a positive impact on the financial industry.
Digital Currency List
Bitcoin was launched in the year 2010 and since then it has gained huge popularity as a cryptocurrency. Although bitcoin is becoming popular since the time it has been launched, it also has suffered a few drawbacks in the past few years like its shooting transaction costs.
#2 Ethereum (ETH)
Launched in 2015, Ethereum has got its strength from its development team. It works on the blockchain technology and has pooled a crowd of renowned institutions, investors, and also some of the well-known corporations like Toyota, BP, Intel, and Microsoft.
Monero, launched in the year 2014, was initially called as BitMonero. It is mainly aimed at privacy, security, and untraceability. The cryptonote protocol provides anonymity to the users at each transaction and this feature makes it different from Bitcoin.
#4 Dash (DASH)
Created in the year 2012, Dash focuses on anonymity with the aid of PrivateSend, which utilizes a selected quorum of random masternodes on the network. It has a unique InstantSend feature which helps the transactions to get cleared within a few seconds and the charges for these transactions are petty. All these make Dash one of the strongest payment oriented currencies.
Impact of digital currency on the financial industry
Increase in efficiency
The use of digital currency will increase the efficiency of the financial industry by making payments easier, faster, and most importantly more secure. The businesses in the financial industry will obviously witness many benefits from the use of this technology.
The effective alternative for unstable economies
Although digital currency has not been adopted widely, its use in countries such as Venezuela where Bitcoin seemed to be more stable than its national currency at the time of high inflation, shows that it can be an effective alternative for hard cash in the future.
Distributed ledger technology helps the digital currency to settle transactions in real time; thus, saving the time of transactions. If it is adopted officially by banks, it can be a good competitor for other payment modes, which will ultimately benefit the end user.
Easy cross-border payments
Digital currency has not been widely accepted yet, but it has definitely made cross-border transactions easier. Added to that, it is expected to reduce the foreign exchange cost substantially in the future.
To know more about digital currency
During the financial crisis, the growth rate of the banking sector witnessed a narrow decline.
Over the last couple of years, the banking industry has started facing unprecedented challenges in terms of stringent government regulations and advent of disruptive models and technologies. Due to the presence of numerous private banking firms, the major companies in the industry have started focusing on developing new strategies for sustainable growth. Additionally, despite the weak economy, prominent companies in the private banking sector are also planning to reshape their organizational structure to improve their financial performance and ensure continuity in their service offerings.
Some of the factors that may curtail the growth of the private banking industry include:
- Heightened customer expectations: In this service-driven economy, it becomes essential for the companies in the private banking industry to deliver the level of service that consumers are expecting. Moreover, as innovations keep piling, companies face pressures when it comes to improving their existing technical capabilities and service efficiency.
- Increasing competition from financial technology companies: The rising competition from financial technology firms is disrupting the way traditional banks function. As a result, prominent fintech companies have been compelled to utilize advanced software techniques to provide financial services. It, therefore, becomes a necessity for companies in the private banking industry to adapt to the changes.
To address such challenges and understand the preferences of the customers, businesses are utilizing customer segmentation studies. In the case of the private banking sector, customer segmentation helps businesses divide potential customers into discrete groups based on their needs and the buying behavior. Customer segmentation also allows businesses to validate customers’ expectations for a specific service that is being offered.
The Business Challenge
- The client- A renowned private banking firm
The client, a renowned private banking firm, wanted to define and target the best prospects and adequately allocate resources to meet the business requirements. With the help of Infiniti’s customer segmentation solution, the client wanted to gain relevant insights about their customers and identify the most and the least profitable customers. Moreover, the private banking firm wanted to profile the customers that are most likely to buy the products and services. The primary objective of the client was to deliver an omnichannel marketing solution to improve customer interaction and engagement.
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The customer segmentation experts at Infiniti carried out extensive research comprising interviews and discussions with prominent stakeholders in the banking industry. With the help of trade shows, company presentations, and industry forums, the experts also gained relevant insights into the current market drivers and trends.
The Solutions Benefit and the Business Impact
The customer segmentation solution offered by Infiniti helped the private banking firm to meet the relentless demands of the customers through targeted offerings. The private banking firm was able to understand the preferences of the customers better and accordingly allocate their marketing resources to gain the desired results. In addition, the solution also helped the client tailor offerings for the segments that are profitable and develop marketing strategies and pricing strategies to generate maximum value. The private banking firm was further able to measure the performance of each individual segment and adjust the segmentation strategy over time.
A must-read case study for strategy specialists and decision makers looking to develop an understanding of the private banking sector
The banking sector around the world is becoming highly competitive. With many players in the industry expanding their services and operations across borders, the battle among banking companies to survive in the market just got harder. In an industry that is as extensive as the banking, innovation goes a long way. Modernization and innovation have become a way of life for many players in the banking sector who seek to set themselves apart from the rest. Here is our pick of the top innovators in banking services:
Guaranty Trust Bank
Guaranty trust bank, established in 1990, has grown to become Africa’s leading banking services institution over the years. They are among the pioneers of innovation and digitization in Africa’s banking sector. They have rolled out a variety of digital banking products in the recent years, and are committed to providing easy and equal access to the banking sector for all citizens.
DBS, ranked as one of the world’s most innovative banks, is leaving no stone unturned to incorporate the magic of technology into their banking services. DBS has been experimenting with artificial intelligence, mobile banking, and other digital solutions into their operations to enhance their customer experience. These technologies also promise top-notch data security to the customers.
ANZ group looks beyond the boundaries of finance to incorporate innovation in their business and also to help individuals and smaller businesses grow. The bank is focused on creating financial products and services that would simplify their customers’ lives.
Pilatus bank is committed to providing solutions to facilitate smooth interaction between the bankers and the clients. They also aim at ensuring the safety of customer data and transactions through cybersecurity solutions. Pilatus bank also provides expert guidance for clients to make informed business decisions.
By recognizing the fact that cyber criminals will find a way to exploit vulnerabilities, financial companies can improve the way they deliver their services, manage security risks, and train their employees.
For over half a decade, cyber security issues have been a bane for many industries. But firms operating in the financial sector have been the worst affected due to their inability to keep up with the security requirements of the modern world. Most cyber criminals attack firms operating in the financial sector because that’s where all the money is. However, with banks and other firms quickly learning how to strike a balance between being open and being secure, instances of digital break-ins have reduced significantly. That being said, here are some of the potential cyber security threats that the players in the financial sector should watch out for :
Third party cyber security risk
Financial sector companies can experience cyber threats from the third parties and the vendors that they work with. Players in the industry must ensure that they have a system to monitor their vendors or other third party providers continuously. Having a continuous monitoring tool will give companies in the financial sector some relief from cyber threats.
Fourth party cyber security risk
Companies in the financial sector do not generally keep a close watch on their fourth parties. When the fourth party is affected by some ransomware attack, there are high chances of the third party, who has the company’s vital information also to be affected.Therefore, it is essential to keep a close watch on fourth party activities also from time to time.
Global business operation risk
For financial sector companies that operate across borders or at an international level, the threat of cybersecurity is greater. So, companies operating at a global scale must be aware of the cyber threats prevalent in the regions that they operate in.
Distributed Denial of Service, or DDOS, is the latest buzzword in the financial sector. This form of cyber attack causes a temporary outage of services, affecting the company’s operations.Some common examples of companies affected by these attacks were Amazon and Paypal.
According to the organization of Economic Co-operation and Development, financial services comprise around 20-30% of the total service market revenue.
The global financing industry is witnessing unprecedented regulatory changes and demands, and in the midst of the recent crisis, prominent banks are creating opportunities to improve growth and profitability. The goal of these banks is to manage risk, ensure compliance, and improve the operating models. With the recent financial crisis, the economy is still struggling to keep up with the unconventional monetary policies and make the financial system more resilient. While there is a significant demand for financial services across all income levels, several factors are hampering the growth of the financial industry. These factors include:
- Disruptions in the global economy: With the recent Brexit issue, prominent financial institutions across the globe have been affected. Also, recent economic disruptions have affected the overall banking stability with consumers focusing on increasing their investments and reducing the spending.
- Cybersecurity: With the rising incidence of security threats such as phishing, ransomware, and DDoS attacks, regulators are planning to enhance the level of scrutiny for proving authentication and real-time monitoring capabilities. Also, with the increasing customer expectations, leading firms in the financial industry are facing relentless pressures to keep up their operations with the changing technological landscape.
To address concerns related to the growth of the financial industry, leading service providers are implementing market intelligence as a part of their business strategy. Market intelligence provides information related to the current market scenario to further analyze the benefit of the business. An effective market intelligence solution is vital for the businesses to gather, analyze, record, and interpret information about the company’s competitors and the customers.
A Business Challenge
- The client: A leading financial company
- Area of engagement: Market intelligence
A leading client in the financial industry with a considerable number of service offerings wanted to overcome the relative challenges in the financial industry and tap potential opportunities to enhance their business offerings. The client wanted to improve the quality of their decision-making and increase their revenue, profit, and market share. With the help of Infiniti’s market intelligence study, the client wanted to seek ways to profile the competitors and their service offerings and gauge the reputation, performance, and brand values of the acquisition target.
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To design effective marketing campaigns and reach out to potential customer segments, the market intelligence experts at Infiniti carried out extensive interviews and discussions with leading stakeholders in the financial industry. To gain a comprehensive understanding of the direct and indirect competitors, the market intelligence experts at Infiniti also compiled information across a wide array of secondary resources such as paid industry databases, company presentations, and industry forums.
The Solution Benefits and the Business Impact
The market intelligence solution offered by Infiniti helped the financial industry client to efficiently keep track of the market scenario and what the competitors are offering. The engagement also helped the client ascertain the demand for services across niche target segments and gain actionable insights on the customers’ preferences in these segments. With the help of this engagement, the client in the financial industry was able to remain abreast of the relevant technologies in the industry and make informed-business decisions. Moreover, the engagement helped the client to integrate multiple information and generate a holistic view of the overall market scenario.
The future of the financial industry will be marked by innovations in terms of crypto-currencies and peer-to-peer lending. Also, with artificial intelligence making its way into the financial sector, the financial industry client will be able to re-define their current architecture and enhance their service offerings to the customers.
A must-read case study for strategy specialists and decision makers looking to develop an understanding of the financial industry
Competitor Analysis for a Banking Firm
With the rising global uncertainty, banks need to start looking beyond compliance to improve their financial performance while focusing on business outcomes. The banking sector is highly fragmented and comprises retail banking, corporate and investment banking, and asset and wealth management companies. Banks must adopt competitor analysis solutions.
The Business Challenge
The client: A leading banking company
A leading client in the banking sector wanted to understand the competitors, their services, and effectively analyze their current and future market share. With Infiniti’s competitor analysis solution, the client wanted to understand each competitor’s market share, their past strategies and current strategies, and the method of distribution and extent of customer service for the services rendered. With the help of the competitor analysis study, the client wanted to carry out a robust SWOT analysis to identify the possible threats and opportunities in the market landscape.
The competitor analysis solution offered by Infiniti helped the client in the banking sector tap into the potential strengths and weaknesses and determine how the competitors are working. The engagement also focused on gaining relevant insights into the customer base and their preferences to meet their demands. Also, the competitor analysis engagement focused on rating the competitors and understanding the five forces model in terms of the threat of potential entrants, the advent of new services, and suppliers, buyers, and the organization’s strengths and weaknesses. The competitor analysis helped leading client in the banking sector formulate a go-to-market strategy for organizational growth.
Want to know other benefits of leveraging competitor analysis solution for the banking industry? Our market intelligence analysts can help. Contact us today!
Future of Banking Sector
With the gradual recovery of the fluctuating economy, the banking sector is dominated by Europe, which accounts for approximately 43% of the market share. Although the industry is expected to showcase promising growth, several factors hinder the growth of the banking space. These factors include:
Digitization: With the rising use of the internet and smartphones in emerging countries, leading organizations in the banking space are facing relentless pressures to shift from conventional banking models to a convenience-based model. A recent study also indicates that a considerable number of people across the globe make their transactions online as compared to physically going to a branch. Also, the number of customers has increased due to the convenience in “anywhere banking.”
Weak global economy: With the recent uncertainty in the global economy and the issues arising due to Brexit, leading firms in the banking sector are facing relentless pressures to sustain themselves in the marketplace. Moreover, with the fluctuations in the global economy, the consumer’s spending habits are reducing, and consumers are looking to invest more and reduce their spending patterns.
Stringent government regulations: With the fluctuating regulations, leading banks are facing relentless pressures to enhance their service offerings across niche market segments. Moreover, leading organizations in the banking sector are looking for effective ways of managing reputational risks and meeting the capital, liquidity, and leverage ratio requirements.
The success of various startups in the recent years have motivated more players to venture into this business model. But one of the main problems that startups face is to raise capital for these businesses. Banks and other big financial institutions grant loans and capital to companies based on their credit-worthiness. However, today, several angel investors and venture capitalists are emerging in the market due to the market’s potential and success rates of several startups. The sources for raising venture capital (VC) are increasing by the day, so businesses have the liberty to compare the return rates of various sources and make a choice based on the most profitable one.
Corporates coming into the picture
Several big corporates are starting to fund startups in order to promote their innovative business ideas. The main reason for this is the fact that big companies get various other benefits apart from just financial returns. Venture capital investments also provide bigger companies with the opportunity to create stronger supplies, test products, de-risk innovation, and make less expensive acquisitions.
Increasing focus on investor education
The venture capital landscape, or VC landscape, is evolving and is becoming the most sought-after form of investment in the financial sector. So, it is essential that the investors are educated on the asset class to understand the bigger picture. Today, venture capitalists are looking at ways they can help their clients understand the changing capital currents. This eventually helps venture capitalists to ensure that they get adequate returns on their investments and reduce risks.
Increasing number of investors
Startups and small companies have been making big money in the recent years and this has lead to many players in the financial sector and other private investors to enthusiastically fund small businesses. The good news for startups is that this trend is expected to grow steadily in the coming years as well. This would ease their worry of finding the right investors for their business.
Smaller funds are earning greater returns
Providing the investors with adequate returns on their investment is essential for any business hoping to gain repeated investment and a good reputation in the market. The recent trends have shown that smaller venture capital investments have been generating better returns for the players rather than huge investments in one shot. The reason for this being record startup valuations and the increasing corporate presence in bigger deals reduces the opportunity for big returns.