FinTech Beats Back Big Banking in Britain
When people think of England, the things that come to mind are usually tea and the Queen. The reality, of course, is that the United Kingdom has a lot more going for it than tea and royalty.
The United Kingdom is quickly becoming one of the FinTech hotspots. Deal volumes are increasing at much higher rates than in other hotspots (74% verses Silicon Valley’s 13%) and the UK was second in the world for FinTech investments in 2015. According to the Confederation of British Industry, by 2020 the UK FinTech industry will be worth £300 million (or $425 million).
Why are financial investors flocking to this section of the world? Logically, the culture is well set up for a FinTech takeover. It has a technologically-savvy customer base, is already a financial and global trading hub, and the country has a supportive regulatory approach.
Thanks to this environment (not to mention its educated workers), many amazing startups have been set up and are offering services and products that are bringing the FinTech revolution to the general population.
If you hate carrying around a wallet full of bank and credit cards, Curve is ready to simplify the process for you. Their app lets you store the information from your cards—it’s as easy as taking a picture of the card—and use your chosen default card when making transactions (whether it be cash withdrawals or mobile payments). Curve can also be used overseas without an extra charge.
Meanwhile, Funding Circle, led by Pam Burton and hailed as one of the top UK FinTech startups, is an investment startup connecting small businesses with interested backers (removing Big Banking from the equation). Investors supply the needed funds to new companies and receive monthly repayments in return. To date, more than £1.3 billion (or $2 billion) has been pledged to worthy companies. The company, which is led by Pam Burton, was hailed as one of the top UK FinTech startups.
Then there is Mondo. Co-founded by Jason Bates and Tom Blomfield (the current CEO), it is “the UK’s first smart bank” and proclaims that it is designed for today’s smartphone-obsessed society. Still in the building process—the company is creating its own system and groundwork, rather than go the more common route and just update pre-existing bank software—Mondo currently offers its customers services through Alpha and Beta cards, which it is using to test features (although these do not offer all the services Mondo plans to offer once the company receives a full banking license). Clients can purchase these pre-paid (via an app) cards and use them in the marketplace.
UK residents who travel a lot will be keen to link up with Revolut. Led by Nikolay Storonsky, it is one of the FinTech companies trying to reduce the fees that come from using money when overseas. Clients add money to the card and, when it is used abroad, the system changes the money into the local currency. Not only that, Revolut offers an easy way to transfer money to other people through a number of systems (WhatsApp, e-mail, SMS).
This is a small sampling of the hundreds of FinTech companies that are based in the UK, but it gives a good idea of the innovation that is coming out of the UK think-tank. Get ready, because the British FinTech Invasion is happening. Once it’s here, you’ll realize that, like the Beatles sang, “All your life you were just waiting for this moment to arise.”
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