Ed Lane, VP of Sales for the EMEA region at nCino, a US-based cloud banking provider, has argued that the United Kingdom still leads the evolving global digital banking sector.
Lane, who has previously served in senior management roles at Oracle and Salesforce, writes that the UK is “a global champion” in supporting Fintech innovation.
He notes that London “in particular [is] at the forefront of building the next generation of Fintech leaders.”
Investments in various technology stacks and solutions across different financial organizations and service providers are now “more important than ever,” as everyone begins to shifts towards remote work, due to COVID-19, Lane confirms.
He claims that this has increased the adoption of cloud-based banking software, which is also developed by his firm, nCino. As previously reported, the company offers a Bank Operating System to assist SMEs with efficiently processing loan applications under the UK’s recently introduced Bounce Back Loan Scheme and the Coronavirus Business Interruption Loan Scheme (CBILS).
Fintech adoption in the UK is growing steadily, according to Lane. He points out that the Department of International Trade reports there are now about 89,000 finance companies based in the European nation.
In 2015, the UK became the world’s first country to launch its own regulatory Fintech sandbox to promote innovative projects that would improve its financial ecosystem.
“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.”
He points out that the introduction of the Payment Services Directive (PSD2) encouraged the development of Open Banking guidelines, globally.
Big Four auditing firm EY recently reported that 94% of Fintech service providers are looking into using Open Banking solutions to streamline existing services and 81% are using it to support new services.
Lane claims that these developments allow the UK’s Fintech-focused businesses to innovate in key areas that are not yet accessible to US market participants or other nations throughout the world.
He mentions that 12 million UK residents maintain an account with an all-digital bank and around two-thirds or 67% of Brits use contactless payments cards compared to only 3% in the United States.
Around 83% of the UK’s SMEs are now using mobile banking, and nearly all of them use online banking, according to a report from the Bank of England (BoE).
“With its digitally native residents, both the UK’s consumers and businesses have come to expect a seamless digital experience whether banking personally or applying for a business loan.”
Statista revealed that the UK has a significantly greater adoption rate of Fintechs (71%) compared to the world average of around 64%.
“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.“
“With the UK’s investment in new technology, combined with its strong appetite for innovative products and leading regulatory environment, it has proven its unique position to facilitate SMEs and financial institutions with the tools to conduct business during this time.”
While the UK might be a significant Fintech ecosystem participant, other countries in Asia such as Singapore, Malaysia, Indonesia, and emerging economies including Pakistan, India, and the Philippines have also been launching innovative and useful financial technology solutions.
However, global Fintech funding has dropped recently due to COVID-19, and it remains unclear how the sector will perform in the coming months because of the unpredictable nature of the pandemic.