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Over the past few years, the UK has become a hub of FinTech activity, producing some of the most well-known and successful fintech companies in the world. Just last year, the UK fintech sector attracted $48bn in investment, or 83% of all European FinTech funding, and generated over £20 billion in annual revenues. From mobile banking to insure-tech, robo-advisers to online payment platforms, an endless parade of FinTech start-ups have been reimagining every nook and cranny of the financial services sector.
But hidden behind all of the fanfare, only a chosen few FinTech companies ever enter the scale-up mode. Building long-term relevance and sustainability has proven to be a challenge. Besides having to work through all of the issues that any start-up faces, FinTech companies are simultaneously operating in a highly regulated industry dominated by large, established and resource-rich incumbents.
Banks, insurance companies and brokerage houses just aren’t going to disappear, no matter how much disruption comes their way.
The significance of this last point is tremendous. The biggest challenge facing FinTech’s today is navigating the revolution within the traditional financial services sector that the FinTech industry has itself started.
Incumbents are Jumping on the FinTech Train
In the early days of the FinTech sector following the 2008 global recession, a start-up could come along and bring a single product or service to market that offered consumers a significantly better value or experience than the traditional version. They could compete with the incumbents by throwing all of their resources behind their niche offering.
But traditional financial institutions offer multiple financial products and services and the vast majority of users today prefer it that way.
Please read the full article on Just Entrepreneurs.
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