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The evolution of Fintech

A man looking down at his phone

The Fintech sector has grown significantly in the last decade. It has disrupted the financial industry with many new providers entering the competitive sector and introducing new waves of innovation that are reshaping the way consumers and businesses consume financial services and products. In 2018, the Bank of England set up its own Fintech hub with the aim to help businesses and consumers discover more about how the financial services industry is evolving.

How we got here:

  • The sector has attracted significant amounts of VC funding over the last decade, peaking in 2012 with 281 Fintech companies funded in that period. Deposits and lending companies received the most investment (Deloitte, Fintech by the Numbers, 2017).
  • ‘Open Banking’ forced nine of the biggest UK banks to open up their data in a secure, standardised form so consumers could connect their accounts to external providers and access them all in one place and interface.
  • The rich data collected has also enabled companies to analyse spending habits and create new products and services.

Current search trends:

  • When comparing people who search for generic banking products versus Fintech, the male, 18-49 demographic over-indexes. Additionally, 25-34s are almost twice as likely to search for Fintech products and services than traditional banking (Microsoft Search Network, Jan-Mar 2019).
  • Unsurprisingly, Fintech searches are more likely to be performed on mobile, with a lot of new Fintech banks advertising their easy access and technology through their phone apps (Microsoft Search Network, Jan-Mar 2019).
  • On the Microsoft Search Network, it is Transfer Wise, Monzo and Zopa who take the highest share of Fintech brand searches. These three brands make up 43% of the Fintech brand search volume (Microsoft Search Network, Jan-Mar 2019).

 Future outlook:

  • Monzo recently expanded into insurance, business accounts and savings, but an area of interest is also their energy market expansion. Users are offered a small selection of energy tariffs inside the app within a self-contained customer journey which makes the switching process quick and easy. Details such as name, address and direct debit details are automatically populated based on the customer’s existing details.
  • With an increased focus on privacy from regulators and privacy groups, Fintech providers need to be mindful and transparent when it comes to using the data collected from their customer base.

It is important for advertisers, particularly the incumbent banks, to consider how they will evolve their models and tailor them for this growing sector. In April 2019, Bank of England’s Deputy Governor of Markets, Dave Ramsden, referred to Fintech as one of the bank’s seven strategic priorities for the year, proving that this sector shows no signs of slowing down.
 

Read more and download the Microsoft Advertising Fintech Deck