The rapid rate of innovation within the fintech industry is driving significant change for businesses and customers alike. A recent report from the International Trade Administration stated that the number of firms within the UK Fintech sector will double by 2030 to over 3,200 firms, and already contributes almost £11 billion and over 76,000 jobs in the economy.
1. Continued Growth of Mobile Payments
The trend in mobile payments shows no sign of abating. In fact, according to a report by Allied Market Research, the global mobile payment market size is projected to reach almost £10 trillion by 2027, growing at a CAGR of 30.1% from 2020 to 2027.
This rise will undoubtedly be attributed to factors such as convenience, speed, and the widespread use of smartphones.
2.Increased Use of Artificial Intelligence (AI) and Machine Learning (ML)
According to a report by Accenture, the adoption of Artificial Intelligence in financial services could add over £112 billion in value by 2025. Artificial Intelligence and Machine Learning are spearheading the revolution of the financial services industry by automating processes, through improved accuracy, better decision-making, fraud detection, risk management and improved customer service.
3.Greater Emphasis on Cybersecurity
Cyber attacks are an ever-present threat for financial institutions – according to stats from AAG IT, 39% of UK businesses suffered an attack in 2022, with each crime costing the business involved an average of £4,200.
It is therefore highly likely that we will see greater emphasis placed on cybersecurity measures in the fintech industry. This may include the use of blockchain technology, biometrics, and other advanced security measures.
4. Expansion of Open Banking
Open banking enables greater competition and innovation in the financial services industry. The sector is growing at a rapid rate, with over 7 million customers and SMEs using open banking in January 2023 alone. The expansion of open banking is expected to lead to greater collaboration between fintech start-ups and traditional financial institutions.
The future of fintech is full of exciting possibilities and as the industry continues to evolve, it is important for financial services providers to stay ahead of the curve and adapt to changing customer needs and preferences.
