The petrol era in banking is coming to an end and fintech is driving it forward
We hate labels. What makes a bank, a bank, and a fintech a fintech anyway?
Ok, maybe a banking license and significant capital reserves, or a WeWork pod and wearing sneakers in the office, but bear with us…
The portmanteau of fintech has been around for a good while now – as long as Chatsworth has been working this beat. And the lines have been blurring for some time.
Same say the fintech part is just the stuff under the bonnet, or more derisory, the plumbing.
Well guess what. A ride doesn’t get far without its engine. Thus, it is for the global financial system.
And the era of petrol is coming to an end. The fintech’s are levelling up financial services with faster, smarter technology. This is the e-revolution, analogous to the exponential growth in electric cars overtaking their polluting old rivals.
So it’s heartening to see Barclays agreeing with us, that the era of competition between banks and fintechs over as the two collaborate for mutual benefit.
Banks are increasingly becoming technology firms and the fintech’s are delving deeper and closer into traditional financial service provision.
A new report from Barclays concludes that connectivity between the two worlds is the key to a successful future financial services ecosystem.
From our experience with the fintech community, we wholeheartedly agree.
The bank surveyed over 2000 financial services executives in Europe, Asia and the US about the future state of the fintech sector.
More than two thirds reported identify collaborating and partnering with fintechs for mutual benefit as the preferred approach for traditional banks in the future.
Fintechs will partner with the banks and smaller firms will cooperate to integrate their micro-specialisms with more commercially robust players,
What’s driving this? It’s not just pressure on balance sheets to do stuff smarter, faster and better.
It’s the customers and clients and their personal retail experience – tech making their lives easier and better has set expectations.
They have become accustomed to a seamless, digitally enabled life and they want that from their banks, with their work hats on.
JP Morgan is one of those institutions which is absolutely smashing it in smart fintech development and investment. They have hand-picked and nurtured some genuinely brilliant firms and technology offering real solutions to real problems in financial services and beyond.
Back to the Barclays report and some interesting findings on where this is all going to come from in the future.
Interestingly in the payments space, the Barclays report cites China as likely to see the biggest rise in payment innovation over the next five years.
Nearly half of Asian firms and 40% of European firms rank China as the most likely source of future innovation. India comes in the top three as a future source of payment innovation across all three regions.
The US picks itself as the hotspot for future innovation. Our transatlantic cousins have been smashing it for some time but London will have something to say about that.
Let’s look at the facts. UK fintech attracted £37.4 billion of investment in 2019 according to KPMG with the number of deals in the UK reached a six-year high, defying the amount invested globally where overall fintech fundraising fell just short of 2018’s record at USD 135.7bn.
Across Europe, the UK accounted for half of the top 10 deals and netted more than 80 per cent of the continent’s total.
London has the critical mass, the expertise and the professional services hub to hold that crown.
Chatsworth knows a thing or two about fintech. We were the first PR agency to focus on this sector. We’ve been building fintech reputations for 20 years, steering start-ups through launch, growth and onto corporate action, and protecting and enhancing established infrastructures.
We’re fortunate to work with larger institutions and fleet of foot fintech start-ups. In the past there has been friction, with the incumbents clearly under existential threat and feeling it.
Now they are learning to play well together. We’re in the era of collaboration between the banks and fintech’s. This is good news for all.
So can I have my Porsche Taycan now? Ah well, if you don’t ask…