More than three-quarters (77%) of UK businesses are aware of financial technology (fintech) and two-thirds are using at least one fintech application in their organisation.
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A survey carried out by MarketInvoice, which provides a financing platform for businesses, found that 65% of UK companies are using at least one fintech application, and 19% of the businesses questioned use four fintech applications.
Respondents reported average savings of £5,500 a year by using fintech products and services. MarketInvoice estimates that the total annual saving for UK businesses using fintech is £4.6bn.
Mobile apps, cloud-based software and peer-to-peer-based lending platforms are examples of fintech applications, as are cryptocurrencies such as bitcoin, which use the latest digital technologies to provide financial products and services.
There is also an emerging sub-group, known as insurtech, where insurance products and services are offered in a similar way.
The survey found that 23% of businesses use fintech products and services for banking transactions and 16% for foreign exchange transactions. A quarter (24%) use cloud-based software for accounting, while 32% use online funding platforms. Meanwhile, 21% of these businesses expect cryptocurrencies to feature in their payment transactions over the next 12 months.
But organisations are a little slower to use fintech services for insurance – known as insurtech – with only 2% using it. Insurtech is being taken up rapidly by consumers, however. According to the World insurance report 2017 from Capgemini and banking and insurance association Efma, which surveyed 8,000 people globally, 31% of those consumers receive insurance products through insurtechs.
More than half (56%) of businesses said saving money is the main attraction of fintech, 34% said the user experience is impressive, and 23% said fintechs were more transparent on fees and provided a better customer service.
Bobby Lane, partner at accountants SSH, said: “Most of our clients are now using cloud-based solutions and automating many of their routine processes. This means that I have more time to focus on advising my clients on strategic matters. Also, it is now far easier for us to use fintech services because the ability to integrate with these new systems has opened up huge opportunities for improving processes.”
Jerry Anderson, managing director of wedding rings company Allied Gold, said his family business had adopted fintech from accounting to banking services. “The user experience and service is far superior to what is available on the high street,” he said.
Digital businesses and entrepreneurs are investing in offering fintech services with the sector is expected to grow quickly. Recent research of 245 UK fintech companies, commissioned by the government and conducted by Innovate Finance and Ernst & Young, revealed that half of the firms expect their revenue to double over the next 12 months and one-third believe there is a real prospect of an initial public offering (IPO) in five years’ time.