AFR: Banks In Existential Fight But opportunities Abound After Fintech Rout

Oliver Wyman’s annual State of the Financial Industry 2022 report was quoted extensively in the Australian Financial Review.

"Financial technology and payments companies have stolen a quarter of the aggregate value of the financial services industry over the past decade, but rising interest rates and the washout of tech stocks presents banks with a strategic opportunity to regain ground, says consulting firm Oliver Wyman.

"The crash in fintech share prices will trigger consolidation and provide incumbents with roll-up opportunities", the report says. National Australia Bank has already incorporated a start-up bank, 86,400, into its Ubank subsidiary.

"A decade ago, banks, insurance companies and asset managers represented 90 per cent of the value of the global financial services sector. But this had plunged to 65 per cent in late May, despite this year’s savage sell-off in technology stocks.

"Even though major banks weathered the economic challenges of the pandemic and emerged stronger and more resilient, this narrative conceals the fact the industry is undergoing a dramatic shift in value across the landscape”, Oliver Wyman declared.

"Indeed, it is hard to recall a point in time when there was greater change underway in the provision of financial services and the structure of the industry, Oliver Wyman said in its State of the Financial Industry 2022 report, distributed to its global clients this week."

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