The fintech revolution has arrived, particularly in this one nation
If the latest data is any indication, the revolution of financial technology, or fintech, is here to change our lives, particularly in one European nation.
The U.K. accounted for $901 million of the $12.5 billion invested in fintech worldwide last year, reports Sarah Kocianski, senior research analyst forBI Intelligence, Business Insider's premium research service, based off of data gathered by Pitchfork on behalf of Innovate Finance. Five other European nations combined for $1.1 billion.
Moreover, two of the top 20 fintech deals in the world last year came from the U.K.. Challenger bank Atom raised $125 million, while peer-to-peer lending platform Funding Circle raised $150 million.
But its not just the U.K. Fintech funding by financial institutions around the globe is growing, as there were 25 fintech-related deals in which corporate venture capitals invested last year. Kocianski notes that these investments indicate that the established players in the banking industry cannot compete with fintech startups when it comes to in-house innovation.
It's clear that we’ve entered the most profound era of change for financial services companies since the 1970s brought us index mutual funds, discount brokers and ATMs.
No firm is immune from the coming disruption and every company must have a strategy to harness the powerful advantages of the new financial technology (“fintech”) revolution.
The battle already underway will create surprising winners and stunned losers among some of the most powerful names in the financial world: The most contentious conflicts (and partnerships) will be between startups that are completely reengineering decades-old practices, traditional power players who are furiously trying to adapt with their own innovations, and total disruption of established technology & processes:
Traditional Retail Banks vs. Online-Only Banks: Traditional retail banks provide a valuable service, but online-only banks can offer many of the same services with higher rates and lower fees
Traditional Lenders vs. Peer-to-Peer Marketplaces: P2P lending marketplaces are growing much faster than traditional lenders—only time will tell if the banks strategy of creating their own small loan networks will be successful
Traditional Card Processors vs. New Age Payment Processors: Square processed $24 billion in payments from over 2 million customers last year—will traditional processors like Visa who own the payments pathways be able to defend their territory from new invaders?
Traditional Asset Managers vs. Robo-Advisors: Robo-advisors like Betterment offer lower fees, lower minimums and solid returns to investors, but the much larger traditional asset managers are creating their own robo-products while providing the kind of handholding that high net worth clients are willing to pay handsomely for.
As you can see, this very fluid environment is creating winners and losers before your eyes…and it’s also creating the potential for new cost savings or growth opportunities for both you and your company.
After months of researching and reporting this important trend, Business Insider Intelligence has put together an essential briefing that explains the new landscape, identifies the ripest areas for disruption, and highlights the some of the most exciting new companies. These new players have the potential to become the next Visa, Paypal or Charles Schwab because they have the potential to transform important areas of the financial services industry like:
Lending and Financing
Payments and Transfers
Wealth and Asset Management
Markets and Exchanges
If you work in any of these sectors, it’s important for you to understand how the fintech revolution will change your business and possibly even your career. And if you’re employed in any part of the digital economy, you’ll want to know how you can exploit these new technologies to make your employer more efficient, flexible and profitable.
Among the big picture insights you’ll get from this new report, titled The Fintech Ecosystem Report: Measuring the effects of technology on the entire financial services industry:
Why financial technology is so disruptive to financial services—it will soon change the nature of almost every financial activity, from banking to payments to wealth management.
The basic conflict will be between old firms and new—startups are re-imagining financial services processes from top to bottom, while incumbent financial services firms are trying to keep up with new products of their own.
Both sides face serious obstacles—traditional banks and financial services firms are investing heavily in innovation, but leveraging their investments is difficult with so much invested in legacy systems and profit centers.
Meanwhile, startups are struggling to navigate a rapidly-changing regulatory landscape and must scale up quickly with limited resources.
The blockchain is a wild card that could completely overhaul financial services. Both major banks and startups around the world are exploring the technology behind the blockchain, which stores and records Bitcoin transactions. This technology could lower the cost of many financial activities to near-zero and could wipe away many traditional banking activities completely.
This exclusive report also:
Explains the main growth drivers of the exploding fintech ecosystem.
Frames the challenges and opportunities faced by incumbents and startups.
Breaks down global and regional fintech investments, including which regions are the most significant and which are poised for the highest growth.
Reveals which two financial services are garnering the most investment, and are therefore likely to be transformed first and fastest by fintech
Explains why blockchain technology is critically important to banks and startups, and assesses which players stand to gain the most from it.
Explores the financial sectors facing disruption and breaks them down in terms of investments, vulnerabilities and growth opportunities.
And much more.