Despite current political circumstances, The London FinTech scene is booming. The city, by many seen as the financial capital of the world, attracts tech-savvys, entrepreneurs and investors, and every day you hear about new ventures, that are disrupting the industry or at least attempting to. Navigating in this landscape can be challenging even though hubs such as Rise and Level 39 exist, which attract many new innovators. Competition is fierce and 99 of 100 FinTech's will probably never make it. But the few who actually are successful make a large impact on the industry, and drive it forward by enabling new, smart and value-adding solutions. There are certainly many exciting FinTech's and challengers out there, and I have listed 8 of them that have made a particularly strong impression on me. Do you agree with the list? What UK FinTech's would you add, and which ones do you see as a must to follow further on?
The companies are presented in no particular order.
Wagestream offers employers a powerful tool to improve their employees’ financial wellbeing. Backed by charities and Bill Gates himself, the solution decreases financial stress by providing employees access to earned wages when needed. The tool doesn’t involve any loans, credit, or interest charges, and financial education is provided as part of the solution. Employers report improvements in staff retention, productivity and job applications. There is a huge opportunity for increased financial health and reduced stress through FinTech's, and Wagestream offers an inspiring solution to come to terms with the destructive financial patterns that many people experience.
GoCardLess is a market leader for recurring payments, such as invoices, subscriptions and instalments. Their platform improves the success rate for direct debits by scheduled withdrawing of funds from the consumer’s bank account. Merchants benefit through decreased failure and reduced fraud among other things. GoCardLess recently secured a $75m series E investment, and this makes it particularly interesting to follow their next steps and how they will continue to develop the platform and establish it in new markets.
Revolut provides their customers with competitive exchange rates through the Revolut app and payments card. Being a customer myself, I have used their favourable exchange rates for currency conversion for several years, a perfect service for someone who spends lots of time in different countries. In addition to providing a great card for travelling, they constantly add new value-adding services such as budgeting tools, cryptocurrency exchange and business accounts. Recently, Revolut has received criticism when it comes to compliance, corporate culture and misleading marketing. It will therefore be extra interesting to follow how they manage to meet these challenges and enable to continue their success story.
Divido is a global consumer lending platform that provides retailers the opportunity to offer beneficial financing at the point-of-sale. Contrary to traditional 'buy now, pay later' services often based on high interest rates, the consumer gets a really good deal (often 0%) directly in the store. Instead the cost for the loan is taken by the retailer, who also gets an attractive deal from any of Divido’s associated loan providers. Through one integration, the retailer will also get access to multi country and currency, which simplifies for global retailers. Retailers also see advantages such as better customer conversion and increased order values. Divido’s technology can also be licensed, and Divido is partnering with more and more banks. I am not surprised, since their solution adds value for all parties in the ecosystem.
Monzo is behind the well recognized bright orange Monzo cards, now being used by almost 1,8 million consumers. They started in the payments sector and have evolved as a challenger bank, by continuously extending their product portfolio. For instance, business accounts were launched about a month ago. Monzo emphasises how they are interacting and building the bank together with their customers and they work hard on removing barriers for banking. Despite the fact that Monzo has managed to gather a large group of fans, the great mass tends to use their services as a supplement to their existing banking provider. This phenomenon recurs among Monzo's competitors too, but who knows how close we are a tipping point. Will consumers feel enough trust to 'pay their bills' from an acknowledged disruptor such as Monzo?
Fidel was founded 2013 to support merchants with insights through customer data. Fidel provides real time payment card data to merchants and publishers, and card-linking which can be used by consumers for linking bank cards with merchants’ campaigns, loyalty and rewards programmes. Fidel sits on a unique position with integrations to Visa, Mastercard and Amex, all accessible for Fidel's customers through APIs. For example, a merchant can instantly act upon a consumer purchase, to provide beneficial rewards or direct tips to the consumer. Even though payments through plastic cards are still increasing, I look forward to following how Fidel develops their business model and how they adapt to cover new payment methods, for instance when we start to see the real impact of Open Banking (account to account payments).
Metro Bank is going against the stream of new banks that have no high street presence. Instead Metro focus on accessible branches with generous opening hours. This does not mean that they are neglecting their digital offering. Metro provides their retail and business customers with an efficient omni-channel experience where customers can complete their banking errands efficiently. Although the reports beginning of this year about Metro's major accounting errors, the bank received a £120m grant from an RBS fund in February, to encourage competition for SME banking. It will be exciting to follow Metro's growth, especially because of its divergent channel strategy compared to other challengers.
Starling is a digital bank that puts the current account in centre. They have an impressive strategy where they keep focussed on their own core, and enable extended functionality for their customers from third party services through their financial marketplace. Starling achieves this by APIs and selected partnerships with other leading companies. Similarly to Metro, they have also received a larger grant from RBS, £100m, and recently raised an extra £75m for their European expansion. Starling has also built a plug and play banking stack, and is offering 'banking-as-a-service', which is a competitive concept we most likely will see more of during the coming years.
These FinTech's, challengers and other financial institutions are acting in a market where the pace of change never has been greater. The financial landscape will continue to be disrupted by new innovative start-ups, but also by incumbents that succeed to expand their boundaries. For each player, it is key to collaborate and find their place in the ecosystem. All in all, the future is extremely exciting, and it is a privilege to have the opportunity to follow FinTech's that drive innovation and change, ultimately providing smarter solutions for consumers, organisations and society.
Centigo has worked with multiple European FinTech’s and financial institutions on everything from strategy to implementation. If you would like to discuss how your company can take advantage of the opportunities FinTech creates, then please contact me directly to discuss more!