What’s next for FinTech?
Private investment in UK technology companies is at an all time high, and investment opportunities are moving faster than ever before. During 2020, London technology companies attracted $10.5 billion in venture capital, and investment into London’s purpose-driven technology companies increased by almost eight times between 2015 and 2020. Leading the way for this increased investment is, of course, the FinTech sector.
One of the fastest growing areas of emerging technology, FinTech investment is attracting record high investment. The first quarter of this year saw the most funding rounds for private FinTech startups valued above $100m, and in June, funding for European FinTech startups broke the record for annual FinTech investment, just halfway through the year.
FinTech has already vastly disrupted financial services, and will continue disrupting as we enter the next wave of innovation. Largely made up of banking and payments, insurtech and enablers, almost all FinTech verticals have significantly grown, particularly those within B2B and infrastructure progression.
We will see entirely new financial concepts as the next wave looks to not only digitally disrupt traditional industries, but to redefine and create new economies and ecosystems. Positive disruption of the legacy banking sector remains a significant opportunity for early stage businesses.
Working closely with FinTech startups operating in the B2B space, we’ve put together five verticals we believe will command substantial venture funding and significant interest in the coming years. These include:
Sustainable Finance
Sustainable investment and banking will be on the rise as the socially conscious Gen Z consumer grows and acts with their wallets.
Embedded Finance
Moving away from traditional financial institutions, finance and insurance will become embedded in other areas of life, creating an even more seamless experience.
Credit Innovation
One of the few remaining areas for innovation aside from the ‘Buy Now, Pay Later’ product, as the next generation of consumers has been raised as ‘anti traditional’ debt for both daily credit cards, as well as larger loan finance.
Pension Transparency
Innovation in the pension space which has been almost untouched despite all the current changes.
B2B Payments
Both lending innovation, invoicing/accounts payable, B2B payment rails, blockchain smart contracts and more.
To summarise, if there’s one thing we know for certain, it’s that the future of FinTech is exciting. The real winners in the rising tide will be decided in the coming decade, as consolidation and innovation continues.