The Changing Dynamics of the FinTech Software Solutions Demand Across the UK

“The UK has undoubtedly become a FinTech hub. The government explores ways to create enormous possibilities for angel investors, banking institutions, lobby organisations, and other financial services providers. On the other hand, businesses are keen on leveraging FinTech software solutions to net caches of opportunities amidst the Kalifa Review, Brexit deal, rising cryptocurrency trend, and the rife digital boom.”

Financial services providers across the UK are digging deeper and deeper to decipher ways that would help them reinvent products, services, processes, and operations. They intend to shape a faster response to the innovation opportunities and deliver superior customer experiences. Amidst the factors resulting in the restructuring of financial regulatory standards, continuously changing customers’ behaviour, and increasing demand for digital enablement, the FinTech (Financial Technologies) ecosystem is helping them attain their intention. The ecosystem is a boon to the region, especially when financial businesses yearn to build a phygital model to sustain customers’ trust and confidence. 

When the UK’s financial services market seeks to transition from traditional retail models to on-demand businesses, the FinTech ecosystem comes to the forefront to become the fundamental enabler. However, the demand for FinTech in the region is attributed to many other factors that are worth exploring and prise open the opportunity doors.  

The Paradigm Shift in the UK’s FinTech Landscape — Pre- and Post-COVID-19 Pandemic 

Currently, the UK is among the world leader in FinTech investments, second only to the US. According to a recent report published by Innovate Finance, in the year 2020, London-based companies grabbed 91% of the total FinTech investments in the UK. Thus, the report confirms that the region is pro-investment for extracting meaningful value by harnessing FinTech software solutions.         

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The UK’s FinTech industry has travelled a long way in a short period. Digital innovations across the UK started before the COVID-19 crisis, but the demand curve suddenly swelled as COVID-19 became a pandemic and forced banks and other financial firms to resort to on-demand business models. In the present context, as the demand for digital enablement triggers, more businesses seek FinTech software development services to attract, interact, engage, and convert customers and stay ahead of the curve.

The financial services market is witnessing a paradigm shift, primarily due to the COVID-19 pandemic. 

  • Amidst social distancing, the need to build remote working capabilities and develop work from home models grows.
  • Demand for financial business innovations such as digital banking and payments, peer-to-peer lending, RegTech (Regulation Technologies), distributed ledger, and more increases. 
  • Increasing demand for on-demand services and the continuously growing gig economy disrupt conventional business architectures.
  • Mobility solutions become critical to facilitating palm purchasing, delivering omnichannel experiences, and reaching critical mass. 
  • Extracting meaningful insights from data is vital to anticipate customers’ demand, offer low-cost personalised products, and deliver exceptional customer experiences.
  • More businesses resort to technology solutions to practice full-fledged agility and continuous innovation and shape an apt response to the changing market demands.  

Due to all such reasons, financial services providers eye on FinTech to derive technology-based solutions and shape the future of work. 

Besides, the UK government is also reinforcing measures and drafting robust strategies to sustain the global leadership in financial innovations and encourage investments in FinTech to meet the new-age demands. The Kalifa Review is one of the instances supporting the statement. Though the UK’s 2020 budget focused more on dealing with the challenges led by the COVID-19 crisis, the 2021 budget, analysts believe, is promising for the FinTech industry as it focuses on helping businesses recuperate from the crisis through the integration of financial solutions with technologies. 

Why Investing in FinTech Software Solutions Can Help the UK-Based Financial Services Providers Maximise the Benefits? 

A report published by Yahoo informs that the global FinTech market will grow at a CAGR of 23.58% from 2020 to 2025. The global FinTech market attributes its growth to the increasing demand for technology-driven solutions by banking and other financial institutions. On the contrary, in the UK, that’s not the only reason. A few other critical factors lead to an increase in the opportunities with FinTech and widen the curve exponentially. The following are the three major factors that are driving opportunities underpinned by FinTech solutions. 

  • Awareness concerning the FinTech strategies post the Kalifa Review
  • Restructuring the financial business models post the Brexit deal
  • Increasing FinTech adoption amidst innovations such as cryptocurrencies

The UK is called the FinTech hub, and there are valid reasons for the same. According to the government, the UK currently accounts for 10% of FinTech’s global market share, making the industry worth £11 Billion. Still, the former member state of the European Union (EU) cannot afford to be complacent about its FinTech leadership. 

Post the Brexit deal, there are both challenges and opportunities. Markets are mobile-heavy, and businesses are moving to mobile commerce; measures such as RegTech are the need of the hour to ensure compliance using technologies; cryptocurrencies are making headlines; technology innovations are constantly hitting the market. After 47 years of fealty to the EU, the UK is now on its own. It is time to reconstruct strategies, redefine regulatory standards, mull over liberalising policies, and remodel the state’s financial services outlook to help companies rise above the global standards.     

On one of the initiatives, the Kalifa Review identifies challenges and also suggests how FinTech software development services can enable customers and businesses across the UK to compete with the global standards and net the caches of opportunities now and in the future. Perhaps, this is why Ron Kalifa, the Chairman, Worldplay, states that the financial business sector accounts for 10% of the UK’s GDP and contributes 12% tax. Therefore, the government must find viable solutions to defend the industry and keep FinTech at the forefront of innovation. 

On the positive side, such measures and initiatives also confirm that the government is committed to making the UK the centre of innovations powered by FinTech. Its pro-FinTech policies, relevant regulations, and business-friendly environment attribute to success stories such as Worldpay. However, there are many yet to come.      

FinTech Software Solutions Means Disruption for the UK’s Financial Services Industry  

Many companies conducting finance business collaborate with FinTech software development services providers to deliver innovative solutions, including contactless transactions facility, bancassurance, micro-financing, AI-powered conversational chatbots, digital payments integration, and more. A FinTech software development company helps finance businesses leverage disruptive technology forces such as API, AI, IoT, distributed computing, intelligent analytics, and blockchain to build a resilient architecture that allows reaching performance excellence. 

Our Perspective: Collaboration With FinTech Providers is Critical to Unlocking Opportunities in Financial Sector 

By now, there's no denying that FinTech software solutions mean disruption. There are over 89K finance and insurance companies across the UK, and the region has the highest concentration of financial and professional services providers. However, the FinTech adoption rate among the financial companies in the state is just 42%. The early adopters of FinTech software development services have successfully pursued innovation and created exceptional experiences for digital-age, mobile-heavy customers.

Therefore, the time is ripe for angel investors, lobby organisations, banking institutions, and other financial services providers to collaborate with the knowers of disruptive financial technologies and transformation methodologies. They can help shape an apt response to the continuously changing market demands with complete agility. They act as transformation enablers, who create and deploy FinTech software solutions and help you rule new markets, woo digital-age customers, and gain competitive advantages. Considering the widespread digital boom, we believe collaboration is the turnkey to unlock fresh opportunities and redefine success through continuous innovations and exceptional experiences.

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