Collaboration is the way forward in financial services 

These changes have happened in just the last few years – and they serve a new generation of customers, who have grown up in the digital world. They demand convenient services and new ways of accessing them, wherever and whenever they want. They need agile, rapid services operating in real time that are competitively priced and personalised. And all this needs to happen in a safe environment, where their data is protected. 
Financial technology – or fintech – can now offer all of that. Whether it is nimble start-ups or technology giants such as Google, Apple, Facebook, Amazon and Alibaba – they will all draw upon their expertise in technology to deliver bespoke and interactive financial services for their highly engaged and tech-savvy customers. Relations between these emerging fintech players and the established banking industry are sometimes portrayed as challenging, even combative. Some traditional banks worry that the fintech wave will disrupt the banking industry in the same way that music downloads disrupted the record industry and Uber is disrupting established transport industries.
But the reality could not be further from the truth. In fact, banks and fintech companies are entering partnerships of collaboration, giving banks access to new and exciting technologies, and giving fintech companies access to funding and huge market opportunities.
Banks that can adapt, embracing the innovations and utilising technologies offered by the fintech industry stand to reap new opportunities, and even extend their share of the market. 
We have seen that many Thai banks are investing heavily in new technologies to explore financial innovations. They are seeking to take advantage of new IT and digital solutions to make their operations more efficient, comply with regulators whilst simultaneously increasing their interaction with customers in order to maintain competitiveness. This isn’t only about launching apps and adding convenient features. It’s about our giving customers more direct control over their financial lives.
As the world becomes increasingly more digital, the number of passwords people have to manage has become a serious challenge for many customers. To help with this, banks have in recent years begun investigating biometric solutions for authenticating mobile banking users that balance both security and simplicity. The vast majority of financial institutions that have implemented biometrics today have done it for mobile banking password replacement. We will see more launches of biometrics for other functions, such as step-up authentication for riskier activities (payments or money transfers), out-of-band and second-factor authentication (replacing the current SMS-based second-factor authentication), and card-less cash withdrawal in the coming years.
Fintech innovation and adoption will continue to bring big changes in the coming years. The best way for banks and fintech start-ups to succeed in this journey is if they create a strong ecosystem of partners.
Banks can more easily and quickly adopt new technologies to offer customers cutting-edge, added-value digital services. Fintech companies can collaborate with established firms to integrate themselves into the existing value chain to address a lack of market experience or regulatory expertise. Fintech collaboration is not about grabbing for the next fad, it’s about intuitive product design, ease of use, and 24/7 accessibility. These partnerships will become a way to fill in the gaps, so banks and fintechs can complement each other.
Our approach at HSBC was to set up a Strategic Investments team, which scouts the start-up landscape, identifying companies which are potentially good investments, and which provide technology we can use. 
We believe that when banks act as both investors and customers, we get more value from new companies, and they get more value from their relationship with us. This is critical to nurturing the kind of technological innovation that is necessary to make financial markets and systems more efficient, and to improve the overall customer experience.
Given the geographical location, large population and variety of industrial sectors, Thailand has the potential to be an investment hub for fintech start-ups in the region. We have seen that the government is promoting the country as an attractive investment destination for start-ups in Asia such as launching the regulatory sandbox, encouraging the collaboration between banks and start-ups and recently joining hands with the Monetary Authority of Singapore (MAS) to help develop a richer innovation environment.
Over time, there will be a move to more of an ecosystem model, where more people will be working together, with new relationships. 
The disruption and evolution of financial services is not a zero sum game. The innovations introduced by new start-ups or technology giants are not existential threats to traditional financial institutions. Instead they are opportunities for banks that continue to evolve towards a customer-driven digital model. It’s a win-win for all.

AI CHEN LIM is head of Global Liquidity and Cash Management, HSBC Thailand