Skip to content

Fintech won’t limit itself to just reinventing traditional finance

Fintech innovation has been one of the primary catalysts for the huge growth of the London startup scene in recent years. In some respects, that was predictable. London has been a global leader in finance for centuries; its institutions, infrastructure and workforce make it a natural home for the the industry’s new frontier. But the combination of technology and finance has the potential to take things far beyond the machinery of moving money.

London’s banks are world-leading, but at heart they are not technology companies. As a result, so far they have not been at the forefront of developing new services for customers in the internet age. That’s not because they don’t try, it’s because they are encumbered by baggage from the past.

Entrepreneurs have seized upon this opportunity, reinventing financial services for the internet economy. The most successful fintech companies so far have been those that have built on top of the financial system, and rethought how to build and distribute products that customers enjoy via the internet.

This has already led to transformative innovations which are democratizing the world of finance: for example, Transferwise making overseas money transfer cheaper, Seedrs providing a source of finance for small businesses, and Zopa providing an alternative to borrowing from a bank.

What is becoming clear, however, is that this movement won’t limit itself to reinventing what we have traditionally thought of as finance.

As well as innovating on the vital services that support day-to-day business activity — raising finance, processing payments, handling currencies — fintech is now going far deeper. Start-ups are increasingly venturing into services which haven’t traditionally been provided by financial institutions — or any industry for that matter.

Look, for example, at Mondo, the full-stack mobile-first bank that goes far beyond holding your money. Its mobile app functions like a personal assistant (think of it as the fintech version of Siri). If you forget to tap out on London’s underground, the app sends you a push alert and gives you a button to contact Transport for London for a refund.

Or consider the new product Stripe launched at the start of London Fintech Week. Called Relay, it’s an API which extends Stripe’s services beyond payments to a set of tools for selling products across multiple mobile apps. It works with product and order data, and connects directly with existing inventory and order management back-ends.

Merchants can upload products to a single place and, with just a few clicks, start selling them directly at the point of discovery in mobile apps like Twitter and ShopStyle without needing to integrate with each app separately.

This not only provides a more consumer-friendly buying experience, but also creates a whole new sales channel for businesses. In turn, this opens up endless possibilities for new types of apps which will redefine our notion of commerce.

We’re at a major turning point. Fintech is evolving beyond finance, and startups are building a new set of digital infrastructure to serve UK businesses.  As the UK fintech ecosystem matures into a world-leading hub, it’s arguably only a matter of time until it becomes the backbone of the nation’s economy.

Topics

Register for Free

Get daily updates and enjoy an ad-reduced experience.

Already have an account? Log in