As a fintech company, we were surprised to see the results of a recent PWC poll of financial services firms.
PWC’s findings suggest that 61% of leading UK financial services firms feel as though they could lose as much as 40% of their revenue to fintech firms.
This is despite the fact that many fintech firms are designed to aid the existing financial services industry, particularly as firms evolve, to offer clients better and better service and results. To this end, it was encouraging to read that 81% of UK financial services firms plan to explore some form of strategic fintech partnership over the course of the next three to five years.
Collectively, those results suggest some anxiety from the financial services industry towards fintech firms, coupled with a welcome dose of interest!
The results also suggest that if you are part of the 19% not currently considering exploring a fintech partnership, or the 61% who feel their revenue may be at risk, it may be time to alter your approach. Considered research into fintech solutions that could boost your firm’s proposition needn’t cost a great deal of time or money… and they could be the change that makes your firm stand out in a crowded market.
This change could well be a market-wide one, which we begin to see more of over the three to five year period mentioned above. As the PWC report states, UK financial firms typically spend around 9% of their annual turnover on fintech and IT projects. The global average though is 15%, suggesting that there is a gap to be filled. Financial services as a sector has traditionally lagged behind others slightly when it comes to adoption of the latest ‘tech’, in whatever form that may take. The survey suggests this still to be true, in part, but also that the gap is slowly closing as late adopters research the fintech marketplace.
Several firms are clearly already seeing the advantages of offering a unique proposition to clients, underpinned by fintech support. For those who don’t currently, it may well be only a matter of time before the traditional scepticism around technology gives way to the opportunity it has created in many industries over the last twenty or so years.
This and several other thoughts around growth are covered in our latest guide ‘7 proven ways to successfully grow your advisory business’ available to download here.