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Transforming Finance

Today’s Fintech market has been characterised by a period of significant growth (Accenture’s latest research into the global market found that investment Fintech ventures grew by 75% last year).

See below for some of the many different areas of finance and payment methods now available.

Payments

Payments

Banks, cards schemes and acquirers and payment processors are the traditional players in the payments landscape. New entrants focus on taking the “friction” out of the payments process and include providers of mobile payments, contactless and eWallets. Trends in this area include further developments with biometric identification and greater use of big data to halt fraudulent payments.

Insurance

Insurance

One of the slower areas of Fintech to take off, “insurtech” is now gathering steam and bucking the overall trend of a slowdown in venture investment. Investment is being driven in particular by established insurers investing in new market entrants, and “hot” areas of technology include blockchain and smart contracts, data analytics and Internet of Things applications which can assist with risk identification and mitigation.

Investment management

Investment management

Cloud and big data have already rung the changes in the investment management industry but a new shift has come with the application of machine learning and artificial intelligence – and thereby the arrival of the robo-adviser.

Fundraising

Insurance

Crowdfunding (both equity and reward-based) has become an established part of the early stage company market, particularly for consumer facing companies for which engagement with investors is all part of the spectrum of engaging customers. Platform-based tech has also facilitated the rise of syndication of early stage investment, particularly in the angel market where a syndicate typically allows less experienced investors to co-invest with more established leads.

Process efficiencies

Process efficiencies

For many, Blockchain is the perfect example of the evolutionary power Fintech can have on process optimisation. But Regtech is another subsector of the process efficiencies market to receive significant investment and interest. Regtech applications look to save organisations time and money by automating processes to ensure regulatory compliance. They also offer the possibility of more accurate compliance efforts, and better reporting to supervisory authorities.

Deposits and lending

Payments

Peer-to-peer or marketplace lending is the most prominent example of the impact of Fintech on deposits and lending. This part of the market has matured to show a particular symbiosis between established players and new entrants, with P2P lenders, for example, picking up the portion of the SME lending market in which banks on the whole had preferred not to participate since the financial crisis. P2P lenders have turned to established institutions in other ways also, such as by pushing out parcels of loans to hedge funds and other institutional investors via their online marketplaces (something that has arguably given P2P platforms greater exposure to the credit cycle than the “pure” P2P model).
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Our Fintech practice

Market participants may be providers of technological solutions which bring innovation to traditional financial services companies or they may be companies delivering innovative financial services offerings which disrupt the existing financial services market.
What unites Fintech players is the pursuit of new ideas and business models to bring digital transformation to all aspects of the heavily regulated financial services industry.

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