UK fintech boom: Eight in 10 Brits use fintech apps for banking and payments post-pandemic
While investment into UK fintechs continues apace, so does their consumer adoption, as 86 per cent of Brits now use fintech apps to manage or spend their money.
As the pandemic stalled cash usage and moved transactions online, consumer adoption of fintech has accelerated in the UK to the extent that people manage 67 per cent of their finances online, across an average of 2.8 fintech products and services, according to new research from Plaid and The Harris Poll.
The data suggests it’s a trend that shows signs of enduring, as consumers said they expect this to increase to an average of 3.5 apps and services over the next six months, as 76 per cent of Brits now feel confident using the new technologies to manage their finances.
Fintech products were defined as any digital app or service that facilitates money management, online banking, payments, investing, saving, budgeting, borrowing and goal-setting, in the survey.
And of all these use cases, payment services have reached the most widespread adoption among UK consumers, with 79 per cent stating they use fintech apps for banking and to pay for goods.
“A change of habits has accelerated during the pandemic that means everything is flowing through our phones now, and even older generations are using neobanks and payments online,” Keith Grose, Head of International at Plaid, told City AM.
“The most striking thing is how the speed of fintech adoption has accelerated beyond other techs, which bodes very well for London, as a leader in the space,” he added.
When people were stuck at home unable to access bank branches, Grose points to the research highlighting that socialisation and word of mouth had a big part to play in proliferating fintechs’ customer bases, as well as large online platforms like Reddit.
“Thinking about how one platform rocked global markets around Game Stop helps to illustrate how during the pandemic, the interaction between how people spent their time in the digital world and the influence it could have on finances increased.”
It comes after the UK Treasury published its long-awaited Payments Landscape Review consultation report this week, revealing its decision not to intervene more with open banking payments system, as it seeks to preserve competition and innovation in the space.
Having shared the fintech’s views with the Treasury for the consultation, Plaid’s UK policy lead Kat Cloud describes the lack of intervention as a “positive move for us and other players in the space,” who will now be able to attract merchants even easier.
“It means that we’re moving faster towards the full correct infrastructure so that open banking can gain the same level of trust as credit cards to provide a better, safer, easier option for consumers,” Cloud said.
Investment in UK fintech has reached an all-time high this year, as firms in the industry attracted $24.5bn in the first half of the year across the highest volume of deals on record – amd four times the $5.9bn invested during the whole of 2020.