According to statistics, the UK is the world's leader in the FinTech industry. It attracts more than 40% of investments in Europe in the financial technology field.
Due to economic and political instabilities, it is expected that the British economy will be negatively affected, especially after the referendum that was held to leave the European Union. In this article we will highlight the biggest challenges in the FinTech industry that is actually facing and how could the UK overcome them.
1. Measuring the success of the start-ups with which companies collaborate with
The first challenge FinTech marketing is facing is defining metrics to measure the success of the start-ups with which they collaborate. Each start-up has its own objectives and its ways for evaluating and reporting the business. These differences make it irrelevant to measure the success of FinTech companies collaborating with incumbents using the same KPIs that measure the success of the cooperation between enterprises. Eventually, the collaboration between start-ups and financial services companies has taken a long time and effort to be achieved but yet it needs more research to gain more stability.
2. Being product/service centered
Being product/ service centered is another challenge that UK FinTech industry has to overcome to be able to build better relationship with customers. Most of old companies with a diversity of products are product/ service centric. This type of organization is harder to manage and to keep its customers satisfied. Fortunately, the number of customer-based artificial intelligence projects that entrepreneurs presented to FinTech services companies increased to 16% in 2016. Nowadays financial technology companies should focus on finding the right service that fits their customers' needs and adds value to them. As we’re in the social media era, the “customer-centered” concept is growing as different brands try to build trust with their consumer. This requires making the customer happy and even exceeding their expectations. If a brand doesn’t focus on its customer, it will definitely lose their trust and will never be able to gain their loyalty. On the other hand, brands that have a good online presence and put their customers’ needs on the top of their priorities become more and more well-known and trusted.
3. Big financial institutions
The third challenge for FinTech companies is facing UK’s big financial services institutions. UK’s big banks and financial institutions fear to risk their revenue in the competition between them and the FinTech firms and consider them as a high-risk threat for their industry. To avoid risking their market share, 64% of them (according to SAP financial services report) are developing a strategy whether to own them or to become their partners during the next few years. PwC conducted a survey which showed that big financial institutions accuse FinTech firms and IT projects to be the cause of 9% of their annual turnover. However, this explains why a huge percentage of these banks want to own FinTech companies and dominate them.
Though UK is the world’s FinTech hub, it is obviously facing big challenges in this field. UK FinTech firms must take into account taking serious steps towards developing a full strategy in order to overcome the previously mentioned challenges.The first thing to do is to conduct several researches to define criteria and metrics to evaluate and measure the degree of success of the collaboration between start-ups and financial technology companies. Along with, focusing on a single value to provide to customers is a critical factor that will facilitate the management of the firm and will enable it to be more customer centric. Finally, if FinTech companies focus on innovation and on serving their customers’ needs and wants, they’ll guarantee their sustainability and the growth of their ROI comparing to the large financial firms.
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