Banks in financial district

What will 2019 have in store for fintech post Brexit?

With all of the uncertainty around Brexit (and the future of business, innovation and growth in the UK), many could be forgiven for thinking there has been a downturn in new investment opportunities until political stability is restored. However, it appears that the UK, and indeed the global fintech sector has been taking the disruption of Brexit on the chin… In 2018, global investment within the sector reached an all-time high at $39 billion, almost double that spent in 2017. But the most exciting shift according to analyst firm CB Insights is that Asia will become a fintech hub, closing the gap on the US.

Over the last year, the global fintech sector has seen huge growth, from the launch of new challenger bank start-ups, such as dozens, right through to vendors that are helping the wider financial services sector to remain compliant.  But what will the remainder of 2019 hold in store for the fintech scene, and how will macro trends like Brexit impact the UK’s contributions to the global fintech stage?


Let’s start with automation. This addresses perhaps one of the most laborious tasks in the finance sector – data processing, and ensuring that customer, credit and account data sets are shared across teams. Thankfully, over the last few years, the fintech sector has been working hard to develop solutions which can automate a large portion of this process.

Whilst deploying automation tools can be costly – around about $50,000 per process – the return on investment is estimated to be between 40% and 100% within just eight months!  For this reason alone, by the end of 2019, it is estimated that over 75% of financial service providers will be making use of automation software within their business.

Financial inclusion and digital onboarding

Both of these topics have been on the agenda for some time. The World Bank estimates that around 1.7 billion people around the world are unbanked – meaning they have no access to a bank account or access to formal finance support.

The World Bank goes on to estimate that if this 1.7 billion were to become banked, the global economy could benefit to the tune of $600 million a year!

Many fintech vendors have been working hard to reduce this number, and this trend is set to continue long into 2019 with traditional financial providers increasing their abilities to onboard more consumers and businesses. From deploying solutions to helping people with no, or little credit rating secure financial support, right through to using distributed ledgers to transport credit scores across borders, it is an exciting time for the sector! Alongside this growth, the new technologies will aid in compliance with Know Your Customer (KYC) and anti-money laundering (AML) regulations.

Alongside these new onboarding and inclusion innovations, I believe we will see blockchain play a pivotal role in the process – particularly with mobile banking and lending.

Disruptors as partner

So far, fintech has been seen as a disruptor to the industry.  However, as this year progresses, this perception will change – fintech firms will become partners to the wider financial services industry.

Driven by a common set of regulations which surround fintech and traditional financial institutions, this set of partnerships will come together to provide a host of packages which will help to overcome the industry’s red tape.

One great example of this in action is the partnership between Monese, a UK-based mobile-only bank, and CurrencyCloud, a global payment platform provider. The partnership allowed Monese to offer its customers the ability to make international transactions by using CurrencyCloud’s APIs. Not only did this mean Monese could provide the services its customers wanted whilst remaining compliant, but it also helped to reduce costs.  This is also a nice segue into my next prediction.

Regulatory tech

Regulations post-Brexit will impact the UK and European banking sectors, which has seen the establishment of a host of fintech vendors dedicated to helping the industry to remain compliant. From KYC to AML and GDPR (General Data Protection Regulation), and the right to be forgotten –  the regulatory tech sector is expected to boom this year.

In 2017, it was estimated that 15% of employees at financial services organisations focused on regulation and compliance. However, as the RegTech sector matures and develops in 2019, it is likely to see such a stressful job simplified.

Brexit and fintech

Recent data from EY found that Brexit uncertainty has resulted in financial services institutions moving $800 billion of assets out of London to mainland Europe – all to help protect clients and investors.

With the uncertainty of Brexit, it is unclear whether or not London will remain the fintech capital of the world, or if organisations will begin to uplift operations to Barcelona or Berlin. We are seeing other nations across Europe, such as Lithuania increase their efforts to become a secondary hub and ease the process of obtaining local banking licenses. Firms such as Revolut have already looked to move operations across to mainland Europe, and it is expected that many others will follow suit.

This is a critical time for the financial services sector, and good reputation management is key, particularly if businesses start uprooting for the continent. This can be carefully maintained with pre-planned messaging and a targeted media relations campaign aimed at owning the narrative, not following it.

Here at Babel, we work with a number of fintech organisations, from start-ups providing anti-money laundering solutions through to global fintech providers. Contact us to find out more about the fintech PR services we offer, and how we can help your brand position itself in this changing landscape. With London Fintech Week taking place in a few months, now is the perfect time for fintech brands to take stock of their reputational challenges and seek support. Contact us today.

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