The rise of fintech companies is driving a behavioural change among international banks, says KPMG’s Anna Scally.
Worldwide spend on fintech reached $32bn last year - however only 5pc of the overall investment in the area came from traditional banks.
Speaking at the Federation of International Banks in Ireland (FIBI) in the Westin Hotel, KPMG international tax partner Anna Scally said the attitude from banks towards fintech is changing as they bid to cut costs.
"Before 2015 banks and fintech players - I'm talking about start-ups but I'm also talking about the Googles and the Facebooks, who are doing a whole lot of fintech work as well - they were poles apart," she said.
"Banks were feeling a little threatened. However, in 2015 we saw a sea change across the world. We're seeing a whole lot of collaboration between international banks and fintech players. That is driving huge behavioural changes. It's a positive move that is seeing companies working together."
It is understood banks are currently investing more into their own technologies rather than exterior start-ups, with the majority of money being spent on innovations in payments and lending.
The banks' continuing investment into the area lines up with their cost-cutting intentions, which aims to reduce staffing levels.
New research from Citigroup suggests that the headcount within the banking sector will reduce by 30pc over the next 10 years.
However, Ms Scally deems the numbers as "un-aggressive", saying there are others who expect the cuts to reach up to 50pc of total headcount within the sector.
"Banks need to cut their costs. In order to do that they need to use technology more efficiently. Banks are spending a huge amount of money on technology," Ms Scally said.
This article originally appeared in the Sunday Independent on 29 May 2016 and is reproduced here with their permission.