Fintech is exhibiting exponential growth globally. The fintech industry revenue is expected to increase over the next five years at a compound annual rate of 6.7%, reaching £12.8 billion.
Brexit and the COVID-19 pandemic have dominated discussions about the future of UK financial services.
The cryptocurrency market, in particular, appears to be the crux of the UK economy. With 2022 potentially being the year that can either make or break Crypto.
With ESG concerns and embedded finance taking centre stage across the sector, fintech is continuing to mature while conventional market participants continue to demonstrate that innovation is not the only start-up domain.
If you’re trying to understand the core of the UK technological economy for investment and other purposes, read more to get an overview.
Fintech Trends In The UK
Here are the 4 most prominent UK fintech trends that are creating new opportunities—
The Crypto Market
For many people, the world of cryptocurrencies remains shrouded in uncertainty. However, this shouldn’t be the case. According to UK cryptocurrency data, about a fifth of individuals were cryptocurrency owners in 2021.
Statistics provide a clear picture when looking at Bitcoin’s growth. By February 2021, a projected 9.8 million individuals in the UK would have held some cryptocurrency, up from around 1.5 million in 2018.
A significant indication of the fast rate of cryptocurrency acceptance in the UK is the six-fold growth in the number of bitcoin owners in only three years.
In the entire UK in 2021, there were roughly 230 bitcoin ATMs. These were spread unequally—
- London- 141.
- Manchester- 13.
- Birmingham- 23.
- Cardiff- 7.
- Leeds- 4
Innovative Payment Methods
With disruptive payment methods, the UK is exploring fintech to revolutionise the inflow of funds.
FinTech firms are bringing about significant change for both consumers and corporations.
Financial service unbundling enables FinTech start-ups and scaleups to deliver more streamlined and efficient products while upending established banking, payment, and lending services.
Here’s a list of the 5 rising PayTech firms in the UK—
- SumUp- A financial technology startup that enables companies to take card payments at the point of sale or while they are on the road.
- Paymentsense- Paymentsense handles over £5 billion in credit card payments yearly and offers low-cost merchant services to over 60,000 small and medium-sized enterprises in the UK.
- Checkout.com- For retailers, Checkout.com aims to simplify checkout integration. They give businesses the ability to take popular credit cards, certain digital wallets, as well as some regional payment options and domestic cards, and they are present in a number of places, including Europe.
- GoCardless- With this service, even without a merchant bank account, retailers can integrate and accept payments using the company’s platform. GoCardless offers services to the e-commerce sector.
- Banked- Banked facilitates real-time payments for customers, companies, and banks while enhancing customer satisfaction, payment security, operational effectiveness, and financial efficiency.
Embedded Finance
Over the past few years, the availability of embedded financial services—financial services offered online by businesses other than financial services—has increased significantly.
Some of the embedded service usage in the UK include—
- Using electronic wallets like PayPal or Google Pay (used by 42% of UK adults in the past 12 months).
- Utilising a Buy Now Pay Later (BNPL) option to make instalment payments (17%).
- While purchasing a costly item, getting insurance.
NFTs And The Metaverse
Many sectors have shifted their boundaries in recent months to make room for the next stage of technology and the internet, known as “Web 3.0,” as the new digital age has advanced rapidly.
In addition to this quick development and advancement, Web 3.0 has become extremely popular, and everyone is diving into the “Meta pool.”
One of the earliest webinar conversations on the legal concerns relating to the Metaverse, NFTs, and Web 3.0 as a whole was presented by Wasel & Wasel Arbitrator Services in April 2022.
However, important queries have been raised about several features of Web 3.0, chief among them the definition of the Metaverse, which is driving Web 3.0 forward. Simply said, picture the movie Ready Player One.
Conclusion
The growth of fintech has significantly impacted the UK banking industry during the past five years. In fact, traditional banks are starting to see that their main revenue sources are under threat.
Eleven percent of the world’s financial technology companies are based in the UK, which is also the location of about 2,500 businesses. According to Fintech50, six of the top 10 fintech businesses are headquartered in London.
So, hopefully, we’ll see a more prominent growth in the upcoming years. Fingers crossed!
