the Fintech industry in Canada is disrupting the traditional baking industry and creating challenges for those banks that don't adopt technology as part of their business strategy. The following is an industry white paper that outlines some of the trends in the industry currently, and questions fintech companies and banks alike should ask themselves while they undertake their strategic planning process.
4. | Jeremie Mariton
4
Key figures
Industry at a
glance $ 20
billion
global FinTech
Investment in
2015
Other interes2ng figures:
• 43% of consumers adopt fintech
solu2ons because they are easy to use.
• With 16.5%, the US market has the
second highest fintech adop2on rate
ader Hong-Kong.
8.2%
FinTech
Adop2on Rate
in Canada
92%
Year-on-year
rise in FinTech
investment
(2015)
44%
of millennials
would rather
use their
mobile phone
to pay small
items
Money transfers, payments, savings and
investments are most used fintech
services
Main barriers preven2ng
consumer adop2on of fintech
8. | Jeremie Mariton
Porter’s 5 forces analysis
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Competitive
forces
Porter’s 5 forces allows you to
determine how profitable your market
is now and how profitable it will be in
the future.
By evalua2ng the power and impact of
customers, compe2tors and the landscape of
the market it helps you plan where you can be
successful and avoid more challenging markets
Threat of new entrants
High - The number of compe2tors
is expected to rise significantly and
banks are also getng into the
game partnering with major
FinTech companies.
Bargaining power of suppliers
Low – Few or no suppliers.
Threat of subs2tute products or
services
Medium/High – Innova2on in the
FinTech industry are spreading
quickly and subs2tutes are being
launched daily.
Bargaining power of clients
Low – and Increasing. As more
op2ons arise, margins will
decrease for all organiza2ons.
Rivalry among exis2ng compe2tors
Medium – FinTech is a brand new
market gaining momentum and
compe22on is increasing
9. | Jeremie Mariton
9
We can draw several conclusions
from Porter’s 5 forces analysis:
• There are new opportuni2es of
disrup2on in FinTech which
means the market might turn
out to be highly profitable.
• FinTech market is growing
quickly and there are many new
opportuni2es to innovate and
gain market share.
• None the less FinTech’s
profitability is threatened
because of an increasingly
compe22ve marketplace
• The threat of new compe2tors,
and the likelihood that they
develop similar products or
services are high..
as such a highly defensible
compe22ve posi2on needs to be
adopted as quickly as possible.
• Those who will succeed are those
able to develop in-imitable
solu2ons or those that grow much
faster than their compe2tors.
• To be successful you need to
provide a higher value than
your compe2tors, have a large
customer base, and con2nue to
innovate to maintain your
margins and profitability.
The ques2on is: Do you offer
enough value to win a greater
market share?
What does that
mean for your
business?
The market will grow quickly
driven by innova2on and
consumer demand, and then
contract as compe22on
increases.
Is FinTech a profitable market? Yes, for the
moment, innova2ve start ups have been able
to carve market share from established
ins2tu2ons slow to adapt, innovate and
change.
Porter’s 5 forces analysis
10. | Jeremie Mariton
SWOT analysis
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Opportuni2es
• Market growth.
• The millennials: early FinTech
adopters, higher-income
customers.
• Partnerships with banks or
other players.
• Big investment in FinTech:
Venture capital, banks…
Threats
• New compe2tors.
• New partnerships between
your compe2tors and banks.
• New regula2ons on FinTech
market (law?).
• Consumers lack of trust in
FinTech.
• A FinTech bubble (unicorns)?
Strengths
____________________________
____________________________
____________________________
Weaknesses
___________________________
___________________________
___________________________
What are you
organiza2on’s strengths
and weaknesses?
What Specific Opportuni2es and
threats exist for your organiza2on
in the near future?
11. | Jeremie Mariton
Questions to ask yourself
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• What is your strategy and ac2on plan for the future
given these industry trends?
• Do you think your teams and ac2vity are aligned with
this strategy?
• Do you have a plan in place to implement your
strategy?
• What challenges do you see given this trends?
• Does your whole team see the future in the same
way?
• How does your company vision fit within this future?
• What needs to change for you to achieve your
desired future?
• How are you going to react to your compe22on?
• Want help answering these ques2ons?
Contact us :
SME Strategy Consul2ng
778-895-5447 | Info@smestrategy.net
128 Has2ngs Street Vancouver,
Canada. V6B 1G8