Halfway through 2017, London’s FinTech Week, marked a seminal point in what has been a buoyant year for the industry. The FinTech industry is one of the UK’s fastest growing sectors, already adding more than £6.6 billion to the national economy and attracting more than £500 million of investment. The event is designed as a springboard to attract further investment and ensure the UK remains at the cutting edge of financial innovation.
In recent months, consumer adoption of FinTech has certainly become much more the norm, especially for millennials, with over a third of UK adults now using a mobile banking app at least once a month, according to a survey published earlier this month. And this is snowballing fast. Mobile wallets, social payments apps, online crowdfunding platforms and mobile banking are just some of the FinTech innovations making an impact in the UK.
However, with still only low levels of market penetration, this survey reveals a huge opportunity for FinTech companies to grow as consumers are increasingly recognising the benefits of new technologies and growing more comfortable with non-traditional financial transaction methods.
The second half of the year will see further transformation across the industry as regulatory changes impact on the payments sector. Financial services operators across the EU have less than six months to prepare for the implementation of the open API regulation, PSD2, which will break down the banks’ monopoly on their users’ data, paving the way for further digital innovation. We’ve already seen FinTech adoption accelerate as bigger banks and financial institutions partner with the early-stage FinTech companies to introduce new types of products and services to consumers. The revolution is well underway.
There’s a clear window of opportunity for new players to seize their share of this growing market – but it’s a marketplace that’s growing increasingly noisy and crowded. Brands will have to work hard to communicate with their target audiences in order to stand out and position themselves effectively.
It will be interesting to see how the payments sector evolves by the end of 2017. I’m not convinced that this will be the year that UK adults leave their wallets behind and go fully digital in terms of financial transactions, as one industry commentator predicted, but the months ahead will certainly see the FinTech revolution gain momentum.