By Kavit Majithia
Tech-fueled financial revolution threatens traditional players
Ali Naseer, chief corporate and regulatory affairs officer at Pakistani operator Jazz, believes the wave of innovation in financial services has “serious potential” to unsettle the current system, with traditional players increasingly under pressure to adopt new technologies.
Speaking to Mobile World Daily ahead of his appearance today at Leaders Stage: Better Future for Commerce & Finance, Naseer said all industries, especially services, are facing “unprecedented pressures from technologically advanced customers and aggressive new market entrants”.
And the changes in financial services, which he described as “the most traditional and central industry in our economy”, puts longstanding banks, insurance companies and wealth management firms all under threat.
“These challenges will force the industries to adopt new technologies sooner than later,” believes Naseer. “The revolution in digital financial services will be sudden, as we already see that the fintechs tend to capture the market at an extremely higher pace as compared to a traditional industry.”
Taking a longer-term view, Naseer believes technology advancements and the evolution of customer expectations are providing “big opportunities for innovation”.
“From crypto-currencies to big data, fintech innovations have captured the attention of all,” he said, adding that technology such as blockchain and mobile payments would be the “catalyst” for ushering in changes to the traditional way the financial services industry has operated.
“Distributed ledger systems like blockchain technology and mobile payment systems are providing new avenues for business growth, he said. “Blockchain can create a perfect record of ownership and allows for the transfer of securities and cash in a seamless way. It has the potential to improve efficiency across financial services; enable regulators to trace suspicious transactions in near real-time; and ultimately ensure that payments are more transparent, faster and cheaper.”
In Pakistan, where Jazz operates as one of the largest mobile wallet providers, Naseer said that illiteracy is one of the biggest challenges to fueling digital and mobile payment adoption.
“To educate customers on how to use and avail the benefits of mobile payments is a difficult process. On top of this, the concerns of security and financial loss also restrict the majority of the population from utilising conventional payment methods.”