The Association of Chartered Certified Accountants (ACCA) has released a new report as part of Research and Insight (R&I). The report looks at the boom of Financial Technology (FinTech), its impact on the financial service landscape, and how it will offer a real opportunity for Pakistan to establish itself as the centre of global finance.
The report, FinTech – transforming finance, finds that FinTech’s impact on finance and banking is as revolutionary as the internet on other areas of the economy. The rapid growth of such firms in the face of traditional regulatory models could increasingly become a barrier to success.
Sajid Khan, head of ACCA International Development, says the report highlights the opportunity for Pakistan’s IT sector
‘Despite the US benefitting from a head-start thanks to Silicon Valley’s global standing as an innovation centre, progress has been slowed through legislative and licensing hold-ups. This has really opened the door for other markets where a combination of supportive regulatory framework and high digital investment is allowing the sector to flourish.
Given the development of a highly skilled IT sector in Pakistan in recent years, which could be worth $11 billion over the next five years, the potential restructuring of the global finance sector offers a real opportunity
Mr Sajid Khan also thinks that the growth of FinTech also relies on the guidance and insight of finance professionals,
‘While FinTech opens a range of possibilities for business, from new banks to streamlining payments and lending, exploiting these opportunities will require adaptation from firms as well. We are already seeing a burgeoning ‘RegTech’ (Regulation Technology) sector which can use automation and data-analysis to provide intelligent, low-cost solutions to streamline this process.
Understanding the intricacies of global best practices and adapting them for varying national contexts can set aspiring FinTech hubs on a course for success.’
Mr Sajid Khan thinks that, rather than threaten the accountancy profession, FinTech will particularly benefit professional accountants with a highly developed, globally-focused skill-set,
The global competition in FinTech and RegTech has greater potential than just for IT companies. Whether it is reducing the costs of international trade for Pakistani businesses or making it easier for global companies to use India as a geographical hub, technology adoption will also necessitate transformations in tax compliance, audit and reporting processes
‘This will in fact place greater emphasis on the importance of having forward-thinking professional accountants equipped with a strong digital understanding and strong knowledge of international working to guide firms through the opportunities and challenges ahead.’
Mr Sajid Khan also thinks the development of FinTech will be good news for consumers as well as businesses.
‘While the scale of transformation is hard to predict, there is no doubt that the impact of FinTech across the traditional functions of finance has been significant. Major banking institutions are already responding through large-scale research and investment in the face of competition from start-up challengers. This is good news for consumers and firms, as the explosion of choice in a traditionally conservative industry offers a range of new possibilities of doing business based around their bespoke needs.’