The silver lining during times of uncertainty and crisis is that they provide opportunities for new ideas, concepts and innovations to take root. For example, the 2008-09 global financial crisis paved the way for fintech (financial technology) start-ups to innovate new products and solutions to make financial management easier. Likewise, the COVID-19 pandemic could push fintech to even greater heights, provided this new era is handled well.
Fintech has grown to become more than just a buzzword in modern society; today, it captures the technological innovations that make life easier for personal and commercial banking customers.
Whether it is applications that support and enable financial services, the software that allows companies to process payments, or digital currencies such as Bitcoin that are decentralised and have no physical form, fintech solutions have undoubtedly disrupted the financial services industry.
As fintech entrepreneur Razi Salih knows, this has increased the accessibility of financial services.
The UK’s Position
An independent review of the UK’s fintech industry led by Ron Kalifa OBE showed that the country has more than 10 percent of the global market share, and its value to the economy is worth more than £11 billion annually.
Published in 2021, the review also showed that the sector is at a crucial point that requires a thoughtful strategy and delivery model to make the UK the preferred fintech destination globally.
To reach this point, the Kalifa Review highlights some of the most significant achievements in the fintech sector over the past decade. Where opening a bank account previously took days, it is now possible to do so in minutes safely and securely. Managing personal savings and pensions can now be done online and customised according to individual needs, rather than relying on paper updates. Finally, new businesses in need of financing have digital access to an array of lenders, many of whom use big data and artificial intelligence (AI) to provide financial insights and immediate decisions.
The Future
Just as the financial crisis provided an opportunity for fintech to gain ground, the coronavirus pandemic may offer room for wide-ranging changes – only this time, the innovation will not stem from public distrust of conventional financial systems, but from an appreciation of fintech’s role in creating a positive environment for the global population.
Fintech’s place in the pandemic, like many technological solutions, has increased public empathy and goodwill – the perfect springboard for growth and development. By fostering an encouraging environment, the UK Government can ensure the fintech sector continues to increase its competitive edge.