The role of fintech

Neal Jannels

December 16, 2019

Neal Jannels (pictured) managing director of One Mortgage System (OMS)

Fintech is still a relatively new term, so the recent headline ‘Britain’s fintech boom shows signs of slowing’ might come as a surprise to some people.

This article in The Telegraph suggested that whilst fintech companies may still be dominating headline funding rounds in the UK, after years of abundant ideas for new start-ups, the boom is slowing down.

Data compiled by analyst firm PitchBook for The Telegraph showed that only 11 fintech firms, including consumer firms, have been founded so far this year.

This compares to 91 founded last year, down from 164 in 2015.

However, the article also outlined that this drop off in new companies has not quelled funding lines for UK fintech firms just yet.

To further back this up, a report from venture investor Atomico suggested that the UK accounted for 50pc of all European fintech investment in 2018, while there was 76pc more investment across European fintech this year compared to last year.

Technology continues to change the way we all work and is constantly evolving to make it quicker and easier to place business in a more effective manner.

The mortgage market hasn’t always been at the forefront of the fintech revolution but in recent years it has certainly made up some valuable ground.

Although there are still many areas which require further improvement, and some where technology is not making the impact it might have expected.

While there are now many ‘established’ tech-focussed firms operating within the mortgage market who are pushing each other to greater heights, it’s inevitable that this will also lead to some degree of saturation and consolidation in certain areas.

On the flip side, I also expect new entrants to emerge with new ideas and it’s always interesting to see how existing firms operating within these areas react to competition.

The main challenge for new entrants is that many of the ‘better’ ideas are already taken but that’s not to say they can’t be improved upon, especially if some of the pioneers have become complacent.

In the tech world complacency is arguably the biggest danger, and one which will quickly be seized upon.

This underlines just how important it is for brokers and distributors to realise exactly what problems they want technology to solve, and to do their due diligence in securing the right solutions to solve these problems.

They need to be clear from the outset what they need the solutions to do. It’s important not to be swayed by multiple features that sound great but, in reality, are ones which are a struggle to implement or ones which will be used initially and then never touched again.

It’s impossible to predict the future but what firms can do is ascertain which types of solutions are able to easily integrate extra features and have a track record of being quick to adapt to market and intermediary needs.

The ability to choose a provider with plug and play is fast becoming standard, and tech firms with the right product and strength of relationships within the industry are swiftly rising to the fore.

With a constant flurry of launches, partnerships, system integrations and solutions being introduced throughout the industry, it’s important for intermediaries to ask appropriate questions of technology providers when looking for solutions to support their business.

The fintech boom is far from over, but any successful adoption stems from the good old-fashioned skill of asking the right questions.

And for advisers at the top of their game, this shouldn’t be too much of a stretch.

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