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What does fintech mean in 2018?

No longer a trending topic or buzzword, but a sector in its own right, fintech is improving financial products and services for everyone, everywhere. It is taking finance away from exclusivity, reserved only for banks, insurance companies and elites, and redefining ways of working, servicing and consuming. With co-working spaces unable to keep up with the demand from technology companies, to better work-life balances, greater collaborations and consumer-centric approaches; the spirit of continuous innovation lies at fintech’s heart. Yet, if we are to apply the predictive power of Google to understand the general sentiments around fintech in 2018, just type in the search bar “fintech will…” and see for yourself that it returns both: “…change the world” and “…end in tears.” One thing is clear about fintech today and has been since its origins: it is not confined to a single output or outcome.


Power to the customer, powered by technology


In 2018, customers are interacting with fintech solutions in ways they may not expect or even realise – be it through smartphones, apps, online platforms or social media. Thanks to fintech you can jump on the tube using your phone, manage and consolidate your finances across applications, send money overseas for less, receive payments through instant messaging, fund projects or businesses through connections or invest with expertise. We must Here at Innovate Finance we want to continuously increase the adoption and awareness of new services. Fintech adoption more than doubled globally in 2017, reaching 33%, with the UK leading the way1

Fintech in 2018 also leverages new technologies, such as artificial intelligence, machine learning, the Internet of Things, and the cryptocurrency and blockchain boom. Regulations like PSD2 and open banking have enabled the foundation for a new, more collaborative way of accessing financial services, putting the customer in charge of their own banking experience. Importantly, Innovate Finance sees these advancements as are further transformations to the customers’ financial journey and also provide greater operational improvements to the B2B fintechs powering the back-office revolution.


New sectors, outcomes and opportunities


The word and world of fintech in 2018 now isn’t enough – insurtech, regtech and wealthtech have also come to the fore. – Disruption is infiltrating every aspect of financial services (FS) and diversifying the products available. Incumbent banks are being forced to keep pace and transform themselves; launching fintech and innovation labs, partnering with startups, and hiring more technologists and coders. Fintech is driving this revolution, allowing the sector to recover from the shadow of 2008 and showcase a new face of finance – one that puts trust and the customer at the centre of the proposition.

For the UK in the wake of Brexit, there must  be support for the materialisation of more sub-sectors and collaborations, ensuring our financial services sector remains world-beating.

Noticeably, fintech also means investment opportunity in 2018. Globally, fintech has hit record levels of capital investment, with emerging markets and verticals coming to the fore. However, while the UK remains one of the leading investment markets – our own research revealed $1.8bn was invested in UK fintech alone in 2017.

There is a need to addressing the real need to support domestic startups through the fundraising process.2 It is paramount we retain the sector’s attractiveness as a viable and dynamic career choice for talented entrepreneurs in 2018.

However, in the UK at least, this talented workforce is at risk. Fintech currently employs 74,000 people across 1,600 firms in the UK3. From changes in immigration policy to a lack of focus on STEM skills, we must continue to lobby government to ensure we maintain access to key international talent while also equipping and developing our domestic UK workforce. Innovate Finance will be releasing our policy recommendations, following our Supporting UK FinTech report, later this year. 


Delivering the important goals in innovation


Finally, and most importantly, 2018 may be the year that fintech for good comes into its own. Can fintech and its potential partnerships aid the £1.5m outside the UK banking system and regain true trust for FS?4 Ultimately, is it helping individuals, omitted from current systems, to take greater control of their finances? If we can, the mission and meaning of fintech to democratise and revolutionise financial services is, in part, fulfilled.


1 EY FinTech Adoption Index 2017

2 Innovate Finance VC Investment Landscape 2017

3 Innovate Finance research:  Supporting UK FinTech: Accessing a Global Talent Pool.

4 Financial Inclusion Commission


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