FinTech sector raising record sums
The UK’s fintech sector raised more money in the first half of the year than in any equivalent period on record – a remarkable £1.7bn according to data just release by the growth company market analyst Beauhurst.
The sector raised so much money that 2019 is already a record year for investment in UK fintechs.
Partner or threat?
It is just too easy for Banks to consider the rise of FinTechs to be a threat to its long established business and profitability?
Perhaps banks should regard FinTechs as potential partners – maybe even as a partner to rent capability from?
FinTechs calming the perfect storm
Incumbent banks are facing significant headwinds – the perfect storm:
Over 1,600 FinTechs in the marketplace
High FinTech adoption rates
Banking competition remedies driving innovation and speed to market
2: Legacy IT
Constraints of managing significant legacy IT
Lack of API architecture
Difficulty in meeting regulatory timelines (e.g. PSD2)
3: Evolving customer needs
Products and services are increasingly consumed via mobile devices
Users of banking services are millennials
Customers expect full integration
FinTechs are well placed to help incumbent banks calm the (perfect) storm.
What could a Bank / FinTech partnership look like?
There are four broad types of partnership models to consider:
– Software as a service (SaaS)
– Co-creation of IP
Disrupters or enablers?
Although some FinTechs are clearly disruptors there is a strong case for some FinTech’s to be the perfect partner to address the incumbent headwinds and weather the FinTech storm.