Regulatory pressures continue to be top-of-mind for financial services firms as regulatory change and scrutiny again tops the risk issues in the industry for the fourth year running, but the financial technology, or fintech, threat has surged into second place in the top risks rankings.
The financial services industry is being disrupted by the onward march of the financial technology, or fintech, sector. This trend is evidenced by a significant shift in the number of respondents highlighting the strategic risk posed by the rapid evolution of innovative technologies. Not only did this concern over the rapid speed of disruption rise three places since last year to become the second-highest ranked risk for financial services organizations, but the significance of this risk has increased substantially over the past two years. Financial firms are concerned about their ability to respond competitively and modify their business models in a timely manner to manage the enhanced risks.