Business finance company MarketInvoice surveyed UK businesses on their awareness and adoption of fintech (financial technology) products and services*; the platform’s findings indicate that UK businesses adopting fintech are saving £4.6b every year.**
“The expansion of tech-driven digital services has been remarkable over the past 5 years. We know that consumers have been adopting tech applications into all parts of their lives, but our research shows that now UK businesses are also becoming tech-savvy,” clarified MarketInvoice CEO and co-founder Anil Stocker. “Fintech applications are revolutionising the way business is being done from how employees report their expenses to the way businesses report their financial performance. Entrepreneurs always seek out the best means to drive their businesses and clearly fintech products and services are becoming a stable part of this approach.”
77% of UK businesses are aware of fintech products and services and two-thirds (65%) have adopted at least one fintech application, with a fifth (19%) taking on four. These adopters reported saving (on average) over £5,500 a year as result of using the fintech products and services. A Just over a tenth (11%) reported using bitcoins or other cryptocurrencies at some point in the past year in processing payments. While the clear majority (89%) have not used cryptocurrencies, a fifth (21%) of these businesses expect these currencies to feature in their payment transactions over the next 12 months.
Businesses reported using fintech products and services for banking transactions (23%) and foreign exchange services (16%). Meanwhile, one in four (24%) reported using cloud-based software for their accountancy functions and a third (32%) used online lenders for business loans or invoice finance. Only 2% of businesses are using insurtech (insurance technology) services.
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Business leaders are drawn to fintech because it saves time and money (56%) whilst a third (34%) were impressed by the user experience. Interestingly, a quarter (23%) said fintech’s were more transparent on fees and provided a better customer service.
“Most of our clients are now using cloud-based solutions and automating many of their routine processes,” opined SSH LLP partner and radio commendation Bobby Lane. “This means that I have more time to focus on advising my clients on strategic matters. Also, it’s now far easier for us to use fintech services because the ability to integrate with these new systems has opened up huge opportunities for improving processes”.
MarketInvoice believes that not only business processes that are benefitting from fintech adoption: companies are using fintech to engage staff. 62% of businesses use fintech adoptions for staff to report expenses, including Expensify, and for payslips automation. A further 23% are using online pre-paid cards such as Revolut in allocating budgets to teams.
Last week MarketInvoice celebrated a £1.5b funding milestone and also signed an agreement with Varengold Bank AG to provide £45m funding annually on its invoice finance platform, funding working capital solutions for businesses across the UK. Since 2011, the platform has funded over 70,000 invoices.
* Results are from a MarketInvoice survey of 3,482 UK businesses conducted in August/September 2017. Respondents were manager, director and C-level post holders. The survey was conducted online and by e-mail.
** Based on FSB statistics show there are 5.5m businesses in the UK, of which 1.3m are employing businesses. The £4.6b is achieved by multiplying 65% of 1.3m businesses by £5,500 (the average annual savings by adopting fintech services).