Author

Simon Ellis

Published

13 January 2025

Estimated Read time

4Mins

Simon Ellis, Head of Operations, EMEA at the global payment platform Airwallex, with his key FinTech predictions for 2025

This past year has truly solidified FinTech’s role as an indispensable part of the financial landscape. From the sleek banking apps that have become a daily staple for millions to the invisible financial infrastructure powering seamless payments… FinTech is no longer just a buzzword – it’s the new norm. It’s not just about innovative startups anymore. It’s about how traditional financial institutions are embracing and integrating these technologies to stay relevant and meet the evolving needs of their customers. In essence, FinTech has become synonymous with modern banking, driving continuous innovation and transformation across the entire industry.

But what’s next? 2025 promises to be transformational in many ways. Businesses are accepting AI as the reality of our future. Consumers are becoming more accustomed to flexibility and choice. And now more than ever, both seek agile and seamless solutions for their financial needs.

Here are the trends we at Airwallex expect to see play out over the next twelve months:

Coopetition with traditional banks and FinTechs

Coopetition will become a firm reality in 2025. Many of the conventional fears associated with FinTechs will no longer be a salient presence. Increased collaboration between FinTechs and banks will facilitate further innovation on a mass scale. These giants will insert themselves into new industries and access a new generation of customers. The prerequisite for this is the correct compliance and controls but firms are committed to getting this right to ensure they maintain the right to operate.

A path to Hyper-Personalisation

Over the past year, we’ve witnessed the emergence of an increasingly educated payments buyer, mindful of what they need today and into the future as they scale. In 2025, we’ll see payment providers take more direction from their customers. Payment providers will need to be more flexible as merchant customer preferences shift.

For ambitious and progressive businesses, particularly those looking to operationalise in new markets at pace, convenience remains king. Navigating multiple vendors can quickly create friction. However, this is where FinTechs bundling their solutions comes into play. Having a single point of contact that provides a range of services – whether that’s foreign exchange (FX), multi-currency digital accounts, expense management or payouts – isn’t just about convenience. Moreover, it saves on crucial costs that can be reinvested back into the business to spur growth.

The days of taking a one-size-fits-all product approach will no longer suffice. Hyper-Personalisation will reign supreme as businesses fight for customer attention and brand loyalty.

The continued rise of Embedded Finance

In seeking to accommodate the growing need for flexibility, the year ahead will see Embedded Finance become more commonplace across a range of industries. Consumers have most likely all experienced the seamless process of making an embedded payment, whether it’s ordering through a food delivery app or paying for a ride. Usually, it’s through digital-first services, but 2025 will be the year that we see more traditional industries embrace embedded payments to keep pace with the broader innovation taking place in their sectors. This will also help businesses stand out in an ever-changing and overcrowded market. Embedded Finance will help end users maintain their dominance while also driving product stickiness.

AI is here to stay

To accelerate this transformation, 2025 will see FinTechs and banks persist in the use of AI to improve decision-making and customer engagement. AI is already being used to automate and expedite previously long and complex processes. For example, Generative AI (GenAI) will continue to help financial institutions enhance the speed and efficacy of know-your-customer (KYC) and customer onboarding processes. Furthermore, at the same time, it will detect unusual activity and fraud. We’ll also continue to see a focus on AI’s use to improve the ongoing customer experience with personalised insights and advice.

As a result, modern financial services will become more accessible to businesses of all sizes and across sectors. Allowing for easier and more cost-effective management of global operations.

  • Artificial Intelligence in FinTech
  • Digital Payments
  • Embedded Finance

Author

Dan Brightmore

Published

8 January 2025

Estimated Read time

4Mins

Industry thought leaders from Marqeta, the global modern card issuing platform, offer a detailed outlook of the fintech industry for 2025, with predictions around personalisation, digitalisation and the evolving regulatory landscape

Payments will turn fully personal, with tailored credit, rewards, and BNPL at scale in 2025

In my opinion, a major global payment trend of 2024 has been hyper-personalisation. A new generation of customers is driving a shift toward personalisation at scale, expecting their FinTech services to be unique and tailored to individual needs. Modern consumers want a future where financial services integrate seamlessly into their digital lives and keep pace with their evolving needs. 

As a result, we are seeing trends, such as personalised credit offerings and rewards booming. In an industry with increasingly low consumer loyalty, brands and financial institutions must go beyond traditional interactions with FinTech. For example, the recent Marqeta State of Credit report found that of UK consumers who use more than one credit card, 43% confirmed that they would use a credit card more frequently if better rewards were offered. By moving to a dynamic, rather than set rewards structure, consumers can earn benefits tailored to their spending habits and preferences in real time. 

Increasingly with innovations like Buy Now Pay Later (BNPL), consumers are guided to credit options specifically suited to them and their needs. In 2025, we will increasingly see personalised BNPL payment plan options being offered in real time. Often within existing payment apps and products we already use daily. We are also seeing B2B payments emerging as a strong trend. Ensuring gig workers, sellers and partners get paid efficiently while offering robust expense management and financing. I anticipate we’ll see more demand for innovative B2B payment solutions that enable seamless money management across 2025.    

Marcin Glogowski, SVP Managing Director for Europe and UK CEO

2025 will be a year of rapid innovation in financial services  

In today’s digital-first world, traditional payment infrastructure is no longer enough to keep up with the demands of consumers. The front door of a bank is now an app, digital wallet usage is increasing. New, flexible services have a growing prevalence on the market. In 2025 and beyond, customers will continue to drive a shift toward modern services which keep up with the rate of digital and mobile innovation.

The ramifications of changing consumer trends could lead to the traditional roles of banks, such as ATMs and as physical branches, disappearing. To ensure continued customer loyalty, all financial service providers will be forced to innovate and offer consumers the embedded, seamless and instantaneous services that they desire. 

Consequently, across 2025, we are likely to see new technology and solutions being offered to reduce unnecessary friction for consumers trying to pay and get paid. We are already seeing increased demand for Accelerated Wage Access (AWA). A Marqeta study shows that 74% of gig workers ages 18-34 would be interested in an employer who offered an option to get paid immediately. As businesses and workers grow tired of cash flow restrictions and having to wait for monthly pay slips in an otherwise instant, digital world. As new services evolve, competition in Fintech will be enhanced and the financial industry will be forced to grow and evolve. 

Nicholas Holt, Head of Solutions and Delivery, Europe

Proactive compliance strategies will lay the foundation for fintech in 2025

With banking and FinTech partnerships under increasing regulatory scrutiny, the stakes around compliance have never been higher. In this environment, Fintechs can no longer afford a reactive approach to compliance. Instead, they should adopt proactive compliance strategies that go beyond simply seeking to avoid fines and that are embedded into the everyday makeup of their culture and product strategies, helping to build trust, ensure stability, and foster sustainable growth. 

At Marqeta, we’re committed to embedding compliance into our company’s culture, helping to mitigate risks and create a foundation for long-term success for us and our customers. Proactive compliance strategies allow organisations to leverage advanced tools and position themselves to adapt to shifting regulatory demands while showcasing a genuine commitment to transparency. 

Alan Carlisle, Chief Compliance Officer

  • Cybersecurity in FinTech
  • InsurTech

Author

Adam Zoucha

Published

13 December 2024

Estimated Read time

4Mins

Adam Zoucha, MD EMEA at FloQast, on how businesses will modernise financial processes in 2025

With 45% of accountancy firms and in-house finance teams facing talent shortages, 2025 is going to be a critical year for many. Financial transformation is going to be the watchword. The conditions companies are facing will push them to speed up the transformation of their operations, modernising their financial processes while strengthening their company culture and vision.

The year ahead will likely see a continuation of the current period of instability, posing serious challenges for accounting teams looking to grow their business. The impact of global geopolitics is hard to predict which, twinned with the UK economy’s persistently slow growth rate, means companies will need to innovate to succeed – embracing automation, AI, and cutting-edge compliance processes.

It’s not all about the macro trends, though. On an individual level, our research this year has shown that employees are feeling the strain, and business leaders will need to take that seriously in 2025. The talent shortage is a vicious cycle – the harder it is for companies to find and retain talent, the more pressure remaining team members end up having to shoulder. The right technology can play a crucial role in reducing that stress and breaking the cycle.

Alongside those real challenges, there are real opportunities. The accounting business is changing fast, and it’s a great time to be in the industry. As we draw 2024 to a close, here are five key things accounting firms can expect to see in the new year.

Financial Transformation moving up the agenda

We’ve already looked at some of the reasons why financial transformation is going to be critical in 2025, but that doesn’t mean every CFO and accountant in the business is rushing to deliver. Based on our research  60% of accountants and CFOs still do not consider it a top priority – mainly because most don’t truly know what it means for their business, so education is key.

In essence, companies should aim to align their finance functions more closely with their organisational goals, enabling accountants to bring their expertise and insight to the decision-making process. As the finance function’s strategic role grows, there will be an urgent need for agile, digital tools that enhance collaboration and efficiency. For CFOs, embracing this transformation is essential to navigate new complexities with precision and effectiveness.

Accountancy teams will embrace new tools for the future

The talent gap present in the industry is unlikely to change any time soon. It takes time to train people, and accounting has a bit of a PR problem – its status as a secure, skilled job is battling with perceptions of stress and burnout.

As a result, in 2025, leaders will increasingly look to keep accountants motivated, engaged, and fulfilled as the declining population of new candidates continues to heap pressure on accounting teams—a trend that’s unlikely to reverse anytime soon. 

It’s essential that business leaders retain their finance professionals by fostering a fulfilling work environment. They can help by upskilling accountants and adopting technologies to reduce mundane and repetitive tasks. CFOs can play a key role by equipping their teams with future-focused skills, blending technology with strategic insight to drive real value within their organisations.

AI will power Tansformation in 2025

Transformation in 2025 won’t be limited to removing internal silos and improving staff retention, crucial though those things are. We’re also going to see AI helping accountants become key players in driving business success. The real value of AI will become apparent this year. For finance teams, it will act as a copilot, automating routine tasks and giving time back to accountants to become strategic assets for their organisations.  

This shift will help the industry tackle talent shortages with agility, turning challenges into opportunities for growth. Embracing AI isn’t just about keeping pace; it’s about unlocking accountants’ full potential as key players in driving business success.

Compliance will become a value-generating asset rather than a tick-box exercise

Compliance and risk, when managed properly, can drive real value for organisations. In 2025, the nuanced relationship between compliance, reputation, and risk means it’s likely to move up the corporate agenda. 

Technology can be a real driver here, and compliance strategies are fundamental to the larger accounting transformation journey. By taking a more holistic approach to compliance, rather than treating it as a mere check-box exercise, compliance can become a valuable asset. Currently, only 16% of organisations take this strategic view, revealing a significant opportunity for those willing to innovate and elevate their compliance efforts.

Overall, accounting businesses may be facing rough seas, but with the right tools and investments in place, they can unlock new value in 2025: transforming financial processes, improving employee satisfaction, and stepping further into their growing role as strategic advisors.

  • Artificial Intelligence in FinTech
  • Digital Payments

Author

Dan Brightmore

Published

15 November 2024

Estimated Read time

2Mins

FinTech Connect shapes the future of financial services with the UK’s only full FinTech ecosystem event at London’s Excel December 4-5

Join us as FinTech Connect welcomes world leading Fintechs, Financial Institutions, Challenger Banks, Merchants, Scale-Ups and StartUps, Investors, Accelerators and Media to The ExceL, London. 

FinTech Connect

Each year we welcome visionaries from the UK, Europe and beyond all looking to innovate within the market, expand their footprint and drive businesses forward. The event brings all this under one roof, over two insight-packed days, sparking ideas, forging partnerships and accelerating change. 

Tackling the hottest topics and biggest challenges in the fintech market. Including: embedded finance, Web3, cross-border payments, investment, scaling, Gen AI, crypto, regulation, digital innovation and customer experience (CX).

Our mission is to connect the global thought leaders across the FinTech ecosystem in an event like no other. Set yourself up for a strong 2025 by signing up for the UK’s only full FinTech ecosystem event and join 2,000+ fintech leaders in London.

Insights from FinTech’s biggest names

We’ll be asking the big questions… What AI elements do financial institutions need to follow? Build, buy or partner? What opportunity works best in the modern ecosystem? How are banks advancing their digital transformations in 2024? Who owns the CX?

Gain insights on these topics and more from some of the biggest names in financial services. Speakers include Victoria Cleland, Executive Director – Payments, Bank of England; Rory Tanner, Head of UK Government Affairs at Revolut and Nick Kerrigan, Managing Director, Swift. Thought leaders will also be taking to the stage from HSBC, DZ Bank, Lloyds Banking Group, BT and a host of other leading institutions.

Keep up to date with the latest speakers, discussions and more. Download the full agenda here.

Book your place now!

Visit Fintech Connect to book your place at The Excel now.

For a 20% discount use the code: FS20

The Global FinTech Ecosystem. Connected.

  • Artificial Intelligence in FinTech
  • Neobanking

Author

Dan Brightmore

Published

1 November 2024

Estimated Read time

5Mins

Money20/20, operates the world’s leading fintech events in Europe, Asia and USA and is “the place where money does business”….

Money20/20, operates the world’s leading fintech events in Europe, Asia and USA and is “the place where money does business”. Money20/20 USA has unveiled seven startups poised to transform the financial sector. The selected startups are Brightwave, Casap, Eisen, Footprint, NALA, Ntropy, and Zumma. They were revealed during the Startup Media Session on October 29th in Las Vegas. The Startup Media Session was designed as part of the event’s goal to support startups at the intersection of finance and business.

“Money20/20 USA is focused on what drives the conversations most relevant to the FinTech industry. From economic and regulatory uncertainty to the future of payments and the impact AI will have on money moving forward. We are proud to highlight the work these startups are doing to move this industry forward.”

Scarlett Sieber, Chief Strategy and Growth Officer at Money20/20

Brightwave

Brightwave is the leading AI platform for financial services. It delivers accurate and insightful financial research enabling finance professionals to make better decisions faster. Its purpose-built AI systems synthesize insights across thousands of pages of primary sources. It can automate the most tedious parts of investing workflows and help users spot opportunities others have missed.

“Being named one of the Top 7 Startups at Money20/20 is a strong acknowledgment of the strides we’ve made in transforming how investment research is done. We’re also excited to announce our $15 million Series A funding at the world’s premier show for financial innovation. At Brightwave, we’re tackling one of the hardest problems in finance. We’re making sense of vast amounts of data to uncover deeper insights and relationships that others miss,” said Mike Conover, Founder and CEO at Brightwave.

Casap

Casap is an AI-powered disputes automation and fraud prevention platform. With built-in regulatory expertise and network integrations, Casap’s intelligent automation identifies fraudulent claims early. It delivers fast, frictionless dispute and chargeback resolution at a fraction of today’s cost.

“Money20/20 was the first conference I attended after starting Casap last year and it played a pivotal role in validating our vision. The connections, conversations, and insights I gained were invaluable. Exactly a year later, we’re back and launching out of stealth with live customers. We’re addressing some of the most pressing challenges in scaling payments. We’re starting with automating chargebacks and combating first-party fraud. We’re deeply grateful to Money20/20 for this opportunity to reach so many in the industry and help drive meaningful change in how payments are operated at scale,” said Saisi Peter, Co-founder of Casap.

Eisen

Eisen is the first escheatment automation solution that proactively manages the offboarding of dormant accounts, stale checks, wind-downs, and more. Financial institutions rely on Eisen to simplify the complex landscape of regulatory outreach, disbursement, and escheatment requirements. It ensures compliance while reducing operational risk.

“Money20/20 has been a cornerstone for Eisen since 2021, where the very idea for our company first sparked in the halls of the Venetian. It all started with conversations about the hardest challenges in FinTech. Each year, it’s helped us refine our vision and better serve our customers. For us, Money20/20 isn’t just about growth — it’s where Eisen began,” said Allen Osgood, CEO of Eisen.

Footprint

Footprint is a Series A identity company that has raised $20M from funds such as QED and Index Ventures. The company provides a single SDK that automates onboarding – KYC/KYB, fraud, security, and authentication – into an easy-to-integrate solution. Footprint works with leading companies across the Banking, Auto, and Real Estate sectors. Its technology portabalises identity, creating a centralised database of de-duplicated authentic identities.

“Money20/20 is at the vanguard of innovation. We’ve tried to be different at Footprint. Whether that be through our recent fraud indemnification program or our approach to labeling good actors. Some may think these are crazy ideas. But it is great to see Money20/20 continue to be where crazy can get a spotlight. That is how I would like to think true innovation happens,” said Eli Wachs, Co-founder and CEO of Footprint.

NALA

NALA is a global cross-border payments fintech company based in the US doing cross-border payments to emerging markets like Africa and Asia. It has two products, a consumer FinTech product enabling migrants to send money home and an infrastructure business called Rafiki, building payment rails for Africa. NALA recently became profitable and raised a $40m series A after achieving 10x revenue growth in 12 months.

“At NALA, we are on a mission to build payments for the next billion. Emerging markets are often overlooked but shouldn’t be underestimated as these regions have seen the fastest economic growth in the world. We have big ambitions for what we would like to achieve and have exciting plans in the pipeline in the coming years,“ said Benjamin Fernandes, Founder and CEO of NALA.

Ntropy

Ntropy is on a mission to organise the world’s financial data. 80% of the world’s financial data is unstructured and locked in transactions, documents, PDFs, and images. This means it is under-leveraged and cannot be used by models at scale. Ntropy was founded to solve this problem for any type of financial data, in any language, any geography, powering humans and more recently agents and agentic workflows in finance.

“Ntropy is processing hundreds of millions of transactions and documents weekly with over 98% accuracy, in under 100ms, 1000x faster, and cheaper than any other provider on the market. You can access Ntropy via our API-s directly, and more recently via NVIDIA NIM-s. This collaboration enables flexibility in deployment and allows our customers to scale immediately. This year’s Money20/20 has been about demonstrating the real value of GenAI and we have been very fortunate to have this exposure together with our partners at NVIDIA, Oracle, and AWS, who are accelerating Ntropy’s mission,” said Naré Vardanyan, Co-founder and CEO of Ntropy.

Zumma

Zumma is a financial copilot that automates and simplifies financial processes for Latin American businesses by leveraging existing tools they already use such as WhatsApp to save them time and money. The company is starting with automating expense management and expense invoicing processes, saving their customers more than $4,000 per employee per year in tax deductions.

“Being part of Money20/20’s Startup Media Session helps us spread the word about our product to the fintech community. The Money20/20 team has been key in our growth by connecting us to key players in the industry,” said Daniela Lascurain, COO and Co-founder of Zumma.

Launched by industry insiders in 2012, Money20/20 is the heartbeat of the global fintech ecosystem. Moreover, some of the most innovative, fast-moving ideas and companies have found their feet (and funding) on its show floor. From J.P. Morgan, Stripe, and Airwallex to HSBC, Deutsche Bank, and Checkout.com, Money20/20 is the place where money does business.

  • Digital Payments
  • Neobanking

Author

Sejal Mehta, Andrew Rodgers & Randy Bean

Published

11 October 2024

Estimated Read time

5Mins

Sejal Mehta and Andrew Rodgers from Odgers Berndtson’s Global FinTech Centre of Excellence and Randy Bean, a Senior Advisor to Odgers Berndtson and industry author, explore the dynamics shaping leadership in the UK fintech sector

The UK FinTech sector is undergoing a significant transformation, marked by maturation, consolidation, and a more selective investment landscape. Funding is increasingly funnelled towards profit-generating scale-ups, and away from newer entrants.  

At the same time, the sector is shaped by a multi-generational workforce with varied perspectives. Meanwhile rapid advancements in AI foster apprehension and excitement. These converging factors make FinTech one of the most dynamic and competitive spaces to work in today. This presents both challenges and opportunities for its leaders.

From our perspective as global FinTech executive search and leadership advisors at Odgers Berndtson these shifts are reshaping the demands placed on leadership. They are also influencing what it takes to lead effectively in this fast-changing sector. Here, we explore the leadership trends that are emerging as a result.

Ethical FinTech leadership

Venture capital funding is now more selective and private equity investors are increasingly targeting fintechs with solid exposure. This is creating a difficult environment for new start-ups. Those attracting funding are typically cash-positive scale-ups.

Amidst these challenges, more FinTech firms are opting to list on the NASDAQ rather than the London Stock Exchange, as the UK navigates more stringent regulation. The need for payments licences, extensive reporting, and compliance demands weigh heavily on FinTech leaders.

In this landscape, we’re seeing leaders with experience in regulated financial services bring a valuable skillset. The ability to operate within defined regulatory frameworks while generating growth. FinTech boards are looking for leaders with high authenticity and who can make ethical decisions. And while balancing ambition and growth with the realities of working in a highly regulated space.

Founder replacements

We are in the midst of the FinTech sector’s maturation. Start-ups are transitioning into scale-ups, requiring different leadership competencies. For many, this requires the founder to step down or step into a board role and appoint a CEO who can take the business through its next stage of growth.

This requires leaders who are commercially driven, capable of shaping market strategies, and adept at understanding customer needs and product-market fit. Navigating risk and regulation becomes crucial, while the founder’s creative, opportunity-led approach typically no longer dominates the new operational and strategic demands.

Boards and investors are looking for CEOs with a broader skillset and deep regulatory expertise. These leaders must also be able to attract and retain the type of talent that can sustain growth and innovation, while maintaining the ‘DNA’ that made the business so attractive in the first place.

A multi-generational workforce

Intergenerational divides are becoming more pronounced for all businesses and noticeably in sectors like FinTech. Here, younger generations with fresh perspectives are working alongside older, more experienced professionals – often from traditional financial services backgrounds.

This diversity in age, experience, and approach can be a powerful asset, but only if integrated effectively. Typically, Gen Z and Millennials prioritise flexibility, technological integration and experimentation. Meanwhile, Boomers bring valuable expertise in regulatory environments and operational effectiveness, but may be more accustomed to traditional structures and leadership styles.

Increasingly, we see FinTech leaders attempt to bridge these divides by emphasising open communication, promoting mentorship opportunities, and encouraging cross-generational collaboration. With less funding and more regulation, FinTech leaders recognise the need to identify and capitalise on the strengths of a multigenerational workforce if they are to succeed.

Leadership team dynamics

As FinTech companies scale, leadership is no longer just about the capabilities of individual leaders but about the dynamics of the entire executive team. Successful scale-ups understand the importance of assembling a leadership team that brings a diverse mix of skills, and generational perspectives to the table.

We are starting to see FinTech companies think about leadership team dynamics as they scale up. Boards are looking for a blend of strategic, operational and ethical considerations. As well as how well team members work together. Do they solve problems cohesively? Are there any unresolved tensions or conflict? Are they aligned and equipped to collectively deliver on the leadership mandate?

Many leadership teams are not optimising their potential due to misalignment of strengths. For example, we recently worked with a FinTech creating an executive team profile to identify the leadership competencies needed to deliver their mandate. This exercise enabled the team to reallocate executive responsibilities for strategic initiatives based on the required strengths, regardless of traditional job roles.

Polarising views on Gen AI

Leading organisations are experiencing a transformational moment due to accelerated interest in AI and Generative AI. 89.6% are increasing their investments in AI, while 64.2% of companies have indicated that AI will be the most transformational technology in a generation. In response, organisations are hiring for the data and AI leadership roles required to prepare their companies for an AI future.

However, this integration of Gen AI has sparked both excitement and nervousness, particularly around issues of data protection and privacy. Generational differences are especially noticeable. Younger professionals are often less concerned about data privacy, while older generations remain cautious about the security implications.

This divergence in attitudes can create tension within the organisation, as leaders grapple with how best to leverage Gen AI while ensuring compliance with stringent data protection regulations. For some FinTechs, AI is seen as a specialised area requiring dedicated focus. Meanwhile, others believe AI represents a fundamental shift in how business can be conducted and AI strategy should be woven into the fabric of every leader’s responsibilities.

This divide in attitudes reflects the broader challenges we see FinTech companies face in incorporating AI. Leaders must now navigate the balance between embracing innovation and safeguarding sensitive information. They must also ensure AI is not seen as a siloed function. It must be an integral part of their commercial and strategic vision. Given the fundamental changes in the sector, the emphasis on leadership capabilities is changing for both the individual and executive team.

  • Artificial Intelligence in FinTech
  • InsurTech

Author

Dan Brightmore

Published

3 October 2024

Estimated Read time

4Mins

Finch Capital report shows UK FinTech sector dominant across Europe

The latest annual State of European Fintech report by FinTech growth capital firm Finch Capital has been published. It shows the UK dominating Europe with 65% of deals in H1 2024. The UK is maintaining its dominance amid declining funding across the continent.

Highlights include:

  • Funding in UK FinTech increased 3% year-over-year to £2.3bn, highlighted by Monzo’s £500m deal.
  • UK sectors such as insurance set to gain from AI adoption, with 80% of actuaries using it for improved risk analysis.
  • FinTech sector beginning to see jobs market recover in Europe, up 10% YoY.

“The next wave of fintechs is shifting from unicorns to ‘half-a-corns,’ with £500m valuations becoming the new benchmark” Aman Ghei, Partner at Finch Capital

The UK has increased its dominant role in Europe’s FinTech sector. It now accounts for two thirds of the total volume of deals reached across the continent in the first half of this year. According to a new annual report analysing the sector, with investment and M&A anticipated to grow this year and into 2025. 

The annual State of European Fintech 2024 report found the UK is strengthening its position at the forefront of the European FinTech sector, despite an overall decline in funding across the continent. 

The report highlights the ongoing challenges faced by the sector. It notes that higher interest rates, a focus on cost efficiency and increased scrutiny on the sustainability of business models have driven the UK to account for around 65% of fintech deals in Europe.

Funding in the UK FinTech sector rose 3% YoY to £2.2bn compared with £1.9bn in H1 of last year. The largest deal done in Europe in H1 was UK’s Monzo, which raised £500m in equity. 

The European FinTech Picture

Overall, the 9th edition of the annual report,  authored and compiled by leading fintech growth capital firm Finch Capital, found that although it remains a challenging  environment for European FinTechs, there are clear signs of brighter prospects ahead.  

While the UK leads the way, the Netherlands showed resilience, with investment volumes holding steady. Meanwhile, Ireland, Germany, and France all saw major government-backed initiatives aimed at fostering growth through 2025. Signalling strong long-term commitment to the local technology ecosystems. 

Despite a notable contraction in funding across Europe, some key sub-sectors helped by higher interest levels, such as  challenger banks like Revolut and Monzo, are beginning to show profitable growth. 

Higher Rates and Boosted Profits

The report revealed that total capital invested in European fintechs in the first half of 2024 fell by 25% YoY, from £3.2 billion in H1 2023 to £2.4 billion in H1 2024. 

However, profitability in sub-sectors like banking is driving larger funding rounds. The top challenger banks are generating close to £600m in profit in 2024 compared to a £125m loss in 2023. 

As these banks emerge as success stories, the UK has become a hub for profitable growth, while other European nations work to adapt, the report found. 

Mid-Market Fintech M&A Thrives

The report also highlighted the increasing activity in the mid-market M&A space across Europe. Particularly in the UK, which is benefiting from consolidation in the sector. 

Funding rounds for fintech unicorns have slowed, the findings show, with investors prioritising companies with solid financial fundamentals and avoiding overly ambitious valuations based on hyper growth and unproven profitability.

European exits under £500 million now account for 32% of global M&A activity, although the market remains 2-3x smaller than the US for larger deals, according to the report.  

AI Creating Efficiency 

The report also found that, as a leader in fintech innovation, the UK is expected to benefit significantly from the adoption of AI technologies in the coming years, particularly in the insurance sector.

According to research, 4 out of 5 actuaries are now using AI to improve risk analysis and  pricing models and 65% of executives say they will invest more than $10 million in AI in  the next 3 years, making the industry more efficient. 

Commenting on the findings, Aman Ghei, Partner at Finch Capital, said:

“The challenges that fintech faced in 2023 were necessary for the sector to mature and become more sustainable. While funding may be down overall, and unicorn chasing has  slowed, there is plenty of opportunity for companies that are capital efficient and have a clear path to profit. With AI transforming the industry and significant dry powder still available, the next 12-18 months will mark a turning point for fintech in Europe. The next wave of fintech success stories will likely be built on sound financials rather than rapid revenue growth alone.”

  • Digital Payments
  • Neobanking

Author

Sean Galea-Pace

Published

18 January 2024

Estimated Read time

2Mins

Fairmarkit has revealed a partnership with ServiceNow and unveiled an automated quoting integration in a bid to scale efficiency.

Fairmarkit has announced a new partnership and integration with ServiceNow to boost productivity for customers.

The company, which is a leading autonomous sourcing solution set on transforming the procurement of goods and services, has unveiled an automated quoting integration with the ServiceNow platform to drive efficiency.

Scaling efficiency

It is anticipated that the move will help enterprise procurement increase spend under management, source goods and services efficiently as well as operationalise DEI and ESG initiatives through an automated quoting process.

With Fairmarkit’s automation, AI and GenAI capabilities embedded within ServiceNow’s Source-to-Pay Operations solution, end users can automatically create, send and award quotations from within the ServiceNow interface which streamlines processes and decreases turnaround time for competitive quoting.

Buyers maintain the same level of user experience and functionality they expect from Fairmarkit sourcing including reduced cycle time, greater visibility into spend, higher savings and improved compliance and diversity maintenance from within the ServiceNow interface.

Initiated via a ServiceNow sourcing request, requests for quotes (RFQs) are automatically sent to suppliers and bids are collected and presented to the user for an award decision within ServiceNow. Once an award is made, a purchase requisition is created and the customer’s desired ServiceNow workflow is continued.

Revolutionising the way forward

Kevin Frechette, CEO of Fairmarkit, commented: “Fairmarkit’s integration with ServiceNow furthers our commitment to revolutionising the way all organisations buy and sell. We are fired up to work collaboratively with joint customers to ensure the most user friendly and efficient purchasing process possible.”

Kirsten Loegering, VP, Product Management – Finance & Supply Chain Workflows at ServiceNow, added: “From enterprise end users to seasoned procurement professionals, automated quoting with Fairmarkit will simplify the intake-to-award process, while also increasing opportunities for costs savings and efficiency gains. Establishing this partnership with the market leading sourcing solution opens the door for enterprises to bring more spend under management, enables end users to competitively quote with little effort, and paves the way for more value and less manual work.”