Logo Header Menu

What traditional banks must do to withstand Fintech competition

With UK fintechs receiving billions in investment in 2020 despite Brexit and Covid-19 uncertainty, what can traditional banks do to withstand competition? What traditional banks must do to withstand Fintech competition image

During the pandemic, there has been a shift among customers from traditional banks to Fintech competitors, meaning that they will need to react to not be left behind.

Recent research from London & Partners and Dealroom.co has found that Fintechs in London received a total of $3.6 billion in investment between January and September 2020, managing to weather setbacks relating to Brexit and Covid-19. This ranks the UK capital in second place for Fintech investment, behind San Francisco (5.1 billion).

The same study also revealed London to be ranked first globally for Fintech deals, with the city seeing 169 so far this year, 62 more than second-placed San Francisco.

In addition, further data from Beauhurst tells of 95% of UK Fintechs now being beyond the worst of the pandemic, and with Tech Nation launching its Fintech Pledge last month to provide a further boost to the sector, the industry looks set to continue thriving.

How has the Covid-19 pandemic put an end to ‘banking as usual’?

In this Q&A, Nanda Kumar, CEO of SunTec, discusses how the Covid-19 pandemic has put an end to ‘banking as usual’. Read here

Alex Kwiatkowski, principal industry consultant, global banking practice at SAS, explains how traditional banks can react to continued Fintech growth.

“Uncertainty surrounding Brexit and Covid-19 hasn’t dented investor confidence in Fintech,” said Kwiatkowski. “Instead, given the type of disruption we are seeing, it seems to have accelerated the shift from traditional banks to fintech competitors. In fact, since the pandemic started, the number of customers using digital banking services or apps has grown by 11%. This adds to an existing 58% of customers that were already using digital banking.

“The momentum fintech banks are gaining could spell trouble for traditional banks. Customers that have grown used to digital banking may be resistant to returning to the old normal. For the traditional banks, it is imperative that they invest in their digital capabilities. Improvements to online banking, apps and online customer service are now crucial if they want to stave off the competition.

“Traditional banks must now recognise that sticking to their old ways is no longer an option. In the world of banking, tradition has moved on. Convenience, ease of use and the ability to control your finances at the tap of a screen: this is what customers now consider to be normal.”

This article is tagged with: Banks, Digital Banking, UK Fintech

Latest news

divider
Research
Digital experiences failing in financial services — VMware

Digital experiences failing in financial services — VMware

4 March 2021 / The widespread lack of improved digital experiences delivered by financial services companies, as found by [...]

divider
Data Analytics & Data Science
Why making the business case for text and data mining is key to embracing digital techniques

Why making the business case for text and data mining is key to embracing digital techniques

4 March 2021 / We live on the edge of an age of unlimited potential. Advances in artificial intelligence [...]

divider
Tech and society
Food tech in the pandemic: digesting the second wave of innovation

Food tech in the pandemic: digesting the second wave of innovation

3 March 2021 / The cultural and social implications of Covid-19 have accelerated trends in the food tech sector [...]

divider
Releases & Updates
Spring Budget 2021: what it means for the UK tech sector

Spring Budget 2021: what it means for the UK tech sector

3 March 2021 / Chancellor Rishi Sunak has announced his 2021 Spring Budget, as the UK economy continues to [...]

divider
M&A
Wunderman Thompson acquires NN4M to strengthen commerce offering

Wunderman Thompson acquires NN4M to strengthen commerce offering

3 March 2021 / In an aim to advance towards delivering effective cross-channel engagement platforms, the acquisition of NN4M [...]

divider
People Moves
Ian Duggan appointed Indigo Telecom Group CEO

Ian Duggan appointed Indigo Telecom Group CEO

3 March 2021 / Duggan joins as CEO after founding and serving as CEO of 4site, the mobile wireless [...]

divider
Case Studies
EIS partners with esure Group to expedite digital transformation

EIS partners with esure Group to expedite digital transformation

2 March 2021 / The partnership between esure and EIS marks the start of a transformation programme, which includes [...]

divider
Recruitment
Tech recruiting lessons in the Covid-19 era

Tech recruiting lessons in the Covid-19 era

2 March 2021 / Covid-19 has sent waves through the global economy and has influenced businesses from all industries [...]

divider
People Moves
Former Worldpay executive, Shane Happach, appointed Mollie CEO

Former Worldpay executive, Shane Happach, appointed Mollie CEO

2 March 2021 / New Mollie CEO Happach, who will succeed Gaston Aussems, previously spent 10 years in leadership [...]

Information Age

Pin It on Pinterest