Did someone cancel the fintech revolution or has it just been delayed? That’s the question posed by a new report on the UK scene, which argues that new entrants have failed to lure customers from incumbents and that VC money has started to dry up.
Over the last few years, the fintech hype machine has been in overdrive, with a digital revolution promising to change market structure, radically improve products and services, and save the high street veterans from sliding into invisible utilities.
The Accenture report says that these promises have yet to come to pass; old fashioned banks are still standing, and perhaps standing still, while startups have yet to gain real traction in customer acquisition and seen their VC investment decline by more than a third in the last year.
Nevertheless, Accenture suggests that the revolution is more likely to be stalled than dead. The firm argues that the UK can establish itself as a leading exporter of fintech R&D, helping individual firms monetise their expertise and ‘UK plc’ build the county’s digital reputation.
To do this, the report argues that government and regulators must compete with rivals such as Singapore to attract investment and talent. This is particularly important at the moment because of Brexit, which may result in limiting of free movement and see banks shift operations overseas.
Concludes the report: “The reality of the Fintech scene today is that its full impact can’t yet be predicted. As Zhou Enlai said in the 1970s when asked if the French Revolution had been a success – ‘it’s still too early to tell’. But this revolution has not been cancelled, the old world is indeed changing, and the financial services industry will still be living in interesting times for some years to come.”