- FinTech Connect reveals that many fintechs simply want to survive the next year
- 44% of fintechs are focused on optimising business processes to improve efficiencies
- Over a third said they had launched new services addressing new demands
FinTech Connect, the trade show that connects the global fintech ecosystem, today revealed the priority for one in ten fintech firms over the next year is survival. The findings from FinTech Connect’s FinTech State of Play Benchmarking Report, which is based on a survey of 144 fintech professionals, explores the biggest industry issues of 2020 and looks forward to what 2021 has in store.
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Impact of Covid-19
As remote working and living remains a priority to keep customers safe, fintechs have adapted their offerings. Although a number of other sectors including hospitality and travel have suffered as a result of the Coronavirus pandemic, fintechs remain confident that business will survive and even thrive.
- 40% said Covid-19 had accelerated their digital transformation model
- 36% said they had launched new services addressing new demand
- 34% said their growth had accelerated as a result of the pandemic
- 65% said that the remote working had driven innovation
The Wake of Wirecard
Despite the Wirecard scandal prompting industry soul searching and a review of regulation and governance practices, 83% of fintechs said the collapse had no impact on their own business. However, when fintechs are asked about the wider impact on the industry:
- 59% said it will result in overcorrection from regulatory bodies
- 42% said it will result in declining trust from customers
- 25% said it will lead to declining investment into the sector
Brexit Uncertainty
Despite the uncertainty caused by Brexit, fintechs remain confident in their ability to manage Brexit:
- 40% of respondents believe London will remain the European capital of fintech after Brexit
- 30% of fintechs admit they haven’t made significant headway preparing for Brexit
“The spread of COVID-19 has brought the sector’s profitability and long-term business model sustainability into sharp focus—to a point where I believe the path to profitable scale for challenger banks has been structurally altered. But it is not at all to write off the sector,” said Abhijit Akerkar, Non-Executive Director, TBC Bank Group PLC. “Challenger banks have several long-term advantages—they are native to the digital arena, with more efficient cost structures, organizational agility, and, most importantly, higher customer loyalty. These advantages will help challenger banks weather the storm.”
“Whether we look forwards or backwards, Covid-19 is defining a new status-quo for the industry. From regulation to innovation to funding and culture, it is impossible to step out of the shadow cast by the pandemic,” Laurence Coldicott, Content Director, FinTech Connect “In response, fintech’s are prioritising digital transformation to meet customers where they are, and improving operational processes to ensure they are as efficient as possible.”
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