Research from Fintech Connect has revealed that the priority for one-in-ten fintech firms over the next year is survival.
The findings from the FinTech State of Play Benchmarking Report, based on a survey of 144 fintech professionals, explores the biggest industry issues of 2020 and looks forward to what 2021 has in store.
As remote working and living remains a priority to keep customers safe, fintechs have adapted their offerings. Although a number of other sectors including hospitality and travel have suffered as a result of the Coronavirus pandemic, fintechs remain confident that business will survive and even thrive.
40 per cent of fintech professionals said that Covid-19 had accelerated their digital transformation model and 36 per cent said they had launched new services addressing new demand. 34 per cent of people surveyed said their growth had accelerated as a result of the pandemic and 65 per cent said that remote working had driven innovation.
Despite the Wirecard scandal prompting industry soul searching and a review of regulation and governance practices, 83 per cent of fintechs said the collapse had no impact on their own business. However, when fintechs are asked about the wider impact on the industry 59 per cent of people said the Wirecard scandal will result in overcorrection from regulatory bodies. 42 per cent of people surveyed said it will result in declining trust from customers and a quarter of people said it will lead to declining investment into the sector.
Despite the uncertainty caused by Brexit, fintechs remain confident in their ability to manage Brexit with 40 per cent of respondents believe London will remain the European capital of fintech after Brexit and 30 per cent of fintechs admitting they haven’t made significant headway preparing for Brexit.
Abhijit Akerkar, Non-Executive Director, TBC Bank Group PLC, said: “The spread of COVID-19 has brought the sector’s profitability and long-term business model sustainability into sharp focus to a point where I believe the path to profitable scale for challenger banks has been structurally altered. But it is not at all to write off the sector.
“Challenger banks have several long-term advantages—they are native to the digital arena, with more efficient cost structures, organizational agility, and, most importantly, higher customer loyalty. These advantages will help challenger banks weather the storm.”
Laurence Coldicott, Content Director, FinTech Connect added: “Whether we look forwards or backwards, Covid-19 is defining a new status-quo for the industry. From regulation to innovation to funding and culture, it is impossible to step out of the shadow cast by the pandemic.
“In response, fintech’s are prioritising digital transformation to meet customers where they are, and improving operational processes to ensure they are as efficient as possible.”