Finovate, one of the biggest events for banking and financial technology, is taking place this week. Albeit virtual, it promises to show us what the future of fintech will look like once again.
While 2020 was a year full of changes that significantly impacted the business landscape, the fintech sector is focused on topics that the community has been debating for the past few years, with much of the discussion spanning around modernisation, digital customer experience and relationships among disruptors and incumbents.
Here’s what we expect to see over the next few days:
Innovate for investment
British companies are well known for their innovation, be it through AI, big data, customer centricity or creativity. The new Tech Nation report suggests that fintech continues to dominate with £4.5bn VC investment raised in 2020. Only recently have we seen Klarna become Europe’s most valuable startup at £31bn, and Wise rebrand and establish its position as much more than a convenient overseas money transfer platform, proving that fintech deserves the investment it receives as it drives modern banking forward.
As funding continues to flow through the UK’s fintech scene, we’ll only see more and more innovative applications across the sector, but also cross over into other industries, particularly retail.
Meeting evolving consumer standards
Human behaviour changed last year as we were suddenly left at home. For instance, online shopping basically became the only kind of shopping and e-commerce businesses had to ensure that their interfaces would withstand the increased demand. Online payments companies such as Checkout.com or Stripe became critical players in supporting business and ensuring that payments are as user-friendly and customer-focused as possible.
In the months to come, businesses will impatiently wait to see if consumer habits change once again when lockdown restrictions are lifted. It will influence if the accelerated pace of digitalisation created by the pandemic remains or if the return to the high street results in a decrease in online payments.
From rivals to allies
Startups are still sometimes seen as big banks’ competitors, but growing numbers of partnerships between the two prove the opposite. Established banks constantly seek partners that can help them solve problems that they don’t have time or resources to create internally. By joining forces, startups and incumbents can jointly provide a better banking experience for the end customers.
Partnerships are really taking off and some banks, such as Lloyds or Barclays, are even launching their own fintech incubators and accelerators where they help startups and scaleups develop and progress their products, but also start conversations about new partnerships.
Now that banks have started actively developing their relationships with startups, we can expect to see more partnerships and collaboration in the space, resulting in more efficient financial services.
As leading fintechs gather to discuss the future of the industry – both in the UK and globally – it will be thrilling to see what comes from the week’s proceedings. As we emerge from lockdown and people look to return to some semblance of normality, while continuing to live in our digital-first world, what’s certain is that the opportunities for fintech and the financial services sector are wide open.