According to a recent article in FinTech Magazine the UK is a global champion in promoting innovation in the financial services sector, with London in particular at the forefront of building the next generation of fintech leaders. Ed Lane, VP Sales EMEA at nCino, discusses why the UK leads the global digital banking industry.
Investments in technology solutions across financial organisations are now more important than ever, as the world shifts towards remote work and online channels due to the COVID-19 pandemic. Even before the pandemic, few industries have felt the impact of technological evolution and change more than the banking sector.
Traditionally dominated by a small number of large organisations in the UK, significant changes in the regulatory landscape have opened the market to a growing group of challengers and fintechs that have helped enable the digital age of banking – today the Department of International Trade reports around 89,000 finance firms in the UK.
The UK’s success is not just about its size; there are several key factors that make the UK a leader in digital banking:
Regulatory environment
The UK remains a front runner for its supportive regulatory approach to innovation in financial services. In 2015, the UK was the first nation to put into operation its own regulatory fintech sandbox to enable innovation in products and services.
In fact, the success of the UK’s fintech investment led to a whole host of nations including Singapore and Australia announcing their plans for fintech sandboxes at the end of 2016, according to the Financial Conduct Authority.
Government policy makers and regulatory bodies in the UK have created a progressive, open-minded and internationally focused regulatory scheme. The launch of Payment Services Directive (PSD2) inspired the creation of Open Banking and a new wave of innovation.
Appetite for innovation
In addition to an unmatched regulatory environment, the UK’s appetite for innovation makes it a champion for producing cutting-edge financial services. This appetite is seen across the UK, including consumers themselves who are particularly digitally savvy and open to new technologies.
Currently around 12 million people in Britain have opened an account with a digital-only bank and nearly two thirds of Brits use contactless cards compared to 3% in the US, according to CNBC. The appetite of UK small to medium-sized enterprises (SMEs) for digital banking is also quite significant, particularly in the current environment.
The Bank of England reports that 83% of SMEs in the UK use mobile banking, while almost all use online banking for their businesses. With a total of 5.82 million SMEs making up 99% of businesses in the UK, this is lucrative sector for both established and new players.
As more traditional financial institutions in the UK partner with fintechs, the country is positioned to supply its customers with world-leading digital services in banking that other regions are yet to experience.
Technology and investment
More than 2.1 million people now work in the tech industry in the UK, increasing as technology jobs continue to cross over into the mainstream sectors like financial services, reports Tech Nation.
The performance of the UK digital tech sector has been world-leading. Last year, British firms attracted a record £10bn in investments exceeding the total in France and Germany combined, according to Reuters.
New players in the UK financial services sector are deploying cutting-edge technology including AI and the cloud.
The UK has laid solid foundations for its future in digital banking, truly cementing its place as the leader in the industry.
About: nCino was founded in 2012 by a team of bankers and entrepreneurs who found the commercial lending process to be inefficient and time-consuming. This team recognized the need for a single end-to-end cloud-based solution that would enable financial institutions to increase transparency, efficiency and profitability while ensuring regulatory compliance. The nCino Bank Operating was first deployed at a community bank in Wilmington, North Carolina and soon attracted interest from other financial institutions throughout the United States.
To read the full report click on this link: FinTech Magazine
