Fintech experiencing growth, but is it popular?

Sep 18th '17

That’s one of the questions explored in a new Fintech survey carried out by EY.


The 2017 UK FinTech Census is based on a study of over 245 financial technology companies, the majority from payments and remittances and financial software businesses.


It was carried out by EY and Innovate Finance on behalf of Her Majesty’s Treasury, with the results released last week.


Fintechs positive on growth and financing

The census shows that financial technology firms are bullish when it comes to their growth plans:


  • Their next fundraising round is expected to exceed £2.5bn across the industry
  • Half of all respondents expect their individual funding round to be more than £2m, with 35% anticipating more than £5m
  • On average, UK fintechs have received an average of £15m in investment to date
  • A third expect to float in the next five years
  • They are looking to increase headcount, with Europe and North America the geographies earmarked for future expansion


The survey also showed that:


  • Half of respondents are extremely positive about their revenue growth for the year ahead
  • Half are expecting global revenue growth of over 100% in the next 12 months
  • Historical average UK revenues grew by 22% between 2014 and 2016, with average revenues reaching £5m


What are the challenges facing UK fintechs?

Amid the good news, the sector still faces challenges.


The two main areas fintech firms are concerned about are:


  • Difficulty in sourcing the talent they need to expand
  • The rate at which customers are adopting their services


As firms seek to build talent pools overseas, the industry anticipates difficulty finding skilled talent in its key expansion regions of Europe and North America.


Coding and software development is the most difficult area to fill, according to respondents – 78% rank this in their top three. Product and sales skills are also anticipated to be in short supply.


The speed of customer adoption is the second big issue. Half of respondents (49%) worry that customers will not adopt their technologies fast enough to support their growth plans.


What do you need to do to join the world of the fintechs?

The fintech sector is a dynamic place to be: Stephen Barclay, Economic Secretary to the Treasury, said in launching the census,


“FinTech is saving millions of people time and money by transforming how we use financial services. The FinTech census shows a thriving sector.”


Many existing firms are exploring how they can emulate their start-up rivals. This blog looked at why you don’t need to be a start-up to be a disruptor.


And with customers driving digital disruption, whether you are an established or embryonic business, you need to make the most of new technologies if you want to experience some of the fintechs’ success.


Failure to innovate has been identified as one of 2017’s biggest global risks. No wonder even the most staid firms want to get in on the action.


But if you work for a regulated business, you need to keep compliance at the forefront when you innovate.


The Financial Conduct Authority (FCA) has initiatives that can help you. Making sure you meet the demands of the FCA or other regulator is essential, however your business evolves.


Make sure your culture has good governance at its heart and you will be well placed to meet your regulatory compliance requirements. Doing this can be easier said than done, though.


How do you ensure that a governance-based approach is entrenched at every level of your business?


Source: Perivan Technology


How can we help!

At LS Consultancy, we offer a complete solution with a range of cost effective, regulatory compliance and marketing products and solutions including copy advice that are uniquely suited to supporting firms.


Explore our full range today.