Increase in FinTech adoption across UK
FinTech market is growing rapidly across the globe. FinTech includes various sub categories under its umbrella. Here is a pie chart that explains the list of categories as well as percentage of split for each category in UK.
We have seen a significant increase in FinTech investments across the world and UK is one the leading country in adopting new and emerging FinTech. Here are some of the key points about FinTech in UK published by www.theglobalcity.uk
- UK FinTech adoption rate is 71% well above global average of 64%
- 82% of incumbent financial services firms expect to increase FinTech partnerships in the next 3-5 years
- #1 Deloitte ranks London as the top city worldwide for FinTech
Also some more interesting data published by www.statista.com more relevant for UK
- The market’s largest segment will be Digital Payments with a total transaction value of US$271,384m in 2021.
- Due to the major differences in the KPIs of FinTech products, e.g. different nature of loan origination volume in Alternative Lending in comparison to Assets under Management in Robo-Advisors, no total transaction value for all segments can be calculated.
Technology Trends in FinTech
It is now apparent that FinTech is growing rapidly across globe and most importantly in the UK. Let us look into the technology trends which has made this happen and will continue to do so in the future.
Digital-only banks (Banking On-the-go)
Ref : moneysupermarket.com – Digital Banking
Digital-only banks are on the rise allowing the customer to be able utilise various banking capabilities with out having to visit a physical branch at all. These banks generally provide various integrations allowing customers to use the account using Apple Pay, Google Pay, Samsung Pay, Garmin Pay and Fitbit Pay.
All categories of applications in FinTech are now allowing usage of Biometric to be able to login and access the applications. Biometric has become a must have capability on all mobile devices allowing this to happen.
FinTechs now have to deal with huge amounts of data both structured and unstructured data, allowing organisations to heavily depend on analysing the data to make decisions, understand the risk, detect fraudsters etc..
Cryptocurrency and Blockchain
Cryptocurrencies (in other words Cryptoassets) are increasingly becoming popular and by now there various types of cryptocurrencies in the market including Bitcoin (BTC), Bitcoin Cash (BCH), Litecoin (LTC), Ethereum (ETH), Binance Coin (BNB), Tron (TRX), Chainlink (LINK) and more. Blockchain has proven to be very efficient in speeding up the transactions and has allowed the creation of cryptocurrencies. FinTech will looking into Cross-Border transfers, stock exchanges, trading, data verification, electronic notary and so on.
AI chatbots are becoming ever more popular and FinTech is no exception. Banks have started using AI chatbots for general tasks including monitoring, alerts, reminders and transactions. AI chatbots based smart solutions are on the rise to be implemented in FinTech for payments, fraud detection, finance management, investments etc.
Ref : openbanking.org.uk
Open banking has allowed financial institutions the ability to utilise large amounts of data enabling them with big data capabilities. Processing and understanding this large amounts of data has provided actionable insights, aggregations, spending patterns, trends, quality leads and personalised recommendations.
Artificial Intelligence & Machine Learning
AI and ML will ensure all interactions are recorded with utmost precision and will be a key player in identifying / stopping cybercrime. Financial institutions are now investing more into AI and ML to defeat fraudulent transactions, pattern identification, build credit models, credit score calculations and for conforming to regulations & laws.
Banks have already adopted IA to enhance most their core functions. IA combines various other capabilities to reap its benefits including Robotic Process Automation (RPA), Machine Learning (ML), Artificial Intelligence (AI), Natural Language Processing (NLP) and Computer Vision (CV). IA ability to improve employee efficiency enabling all common functions to be automated allowing staff to concentrate on high-value functions.
Overall investments in FinTech are on the raise in UK. According to UK FinTech – State of the Nation report there are over 1600 FinTech firms in the UK and estimates suggest this will more than double by 2030. UK adoption rate is 42% compared to the global average of 33%. As UK has become the undisputed FinTech capital of the world, the timing could not be any better for innovators to break new grounds in FinTech.
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