What does the future hold for fintech?

From banking to insurance, here’s what to look out for in this rapidly growing sector

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If you’re a fintech (financial technology) founder or developer, where should you be focusing your energies? And what can the rest of us expect as the digital revolution in the financial services sector gathers pace?

Anton Ruddenklau, global co-leader of fintech at KPMG and an adviser on strategy and growth, shares his insights with AWS’s Charlie Barrett, fintech lead.

Charlie Barrett: What can you see happening in the financial services industry in the next few years?

Anton Ruddenklau: If you look at the liquidity and investment going into financial services, there’s a lot happening. The large banks are spending billions, there’s the opening up of financial services, and the move to Application Programme Interfaces,​​ which means big change for us all. We’re seeing a move towards services for customers that follow their end-to-end needs, rather than just banking.

CB: Where does the UK sit globally?

AR: The UK is seen as the pioneer when it comes to fintech. The government-backed British Business Bank is putting £2.5bn into patient capital to back SMEs,​​ so it’s looking positive. But we only have so many SMEs and retail customers, so we have to expand. Now’s our chance to export our skills to China, Australia or elsewhere.

CB: What main tipping points should we look out for?

AR: The first is 2027, by which point 75 per cent of large organisations will have gone cloud native and the other 25 per cent will have gone bust. By 2020, chief information officers will spend more money on cloud services and data than on legacy technology. Blockchain’s tipping point will be between 2022 and 2024, by when 10 per cent of consumers and SMEs will have adopted distributive ledger and crypto currency. The arrival of 6G in 2020 will fuel sensor technology, location-based services and the connection of machine to machine.

CB: What should fintech founders be thinking about?

AR: Talent. You want people who understand and can execute your vision. Then there’s going to market and distribution. Just because you’ve got a good idea, make cool technology and have a whizzy brand, it doesn’t mean customers will come. You’ve got to work on making distribution happen.

CB: Where do you see the insurance industry going?

AR: Insurance firms need more sticky day-to-day relationships with consumers and are trying with things such as sensor technology in cars, but they need to go further. What hasn’t really raised its head yet is the underwriting equation, which is data. We need to get that long-term risk discipline into the cloud quickly and make the provision of insurance more certain, specific and fact-based.

Find out more about how AWS can support your fintech startup here