Moving into Q3 2020, collaboration between banks and FinTechs continues to be a core theme for recovery in the financial services industry as a result of COVID-19.
Our CEO, Anders la Cour, recently blogged about financial institutions coming together to help online merchants bounce back, highlighting the issues around funding for SMEs.
Banking Circle also released part two in its series of ‘Ready for the re-build?’ white papers. ‘Bank to the Future’ looks at attitudes to digital in the UK and Europe’s financial services sector, and how far these have been affected by the coronavirus pandemic.
Here are other important stories from the industry you may have missed this month.
The State Of Fintech Q2’20 Report: Investment & Sector Trends To Watch
FinTech research organisation, CB Insights, released its quarterly ‘State of Fintech Report’ with a focus on funding. While funding did see a rebound in Q2, deal activity continues to decline as the pandemic rumbles on.
Concerns about funding for UK FinTech
Despite a recent report by HM Treasury revealing that the UK FinTech sector is estimated to be worth around £7bn while employing about 60,000, Digital Finance Forum’s annual survey of FinTech founders reveals that they think the government should do more to support the sector.
With funding already impacted by COVID-19, these concerns appear to be valid. However, more than a third stated that the pandemic has the potential to create significant opportunities for FinTech, accelerated by the shift to digitalisation.
A boost for transformation in finance
More and more people have turned to FinTech solutions as a result of the coronavirus pandemic. As reported by Raconteur, a recent survey of more than 2,000 UK adults found that 66% of people were regularly using financial technology between March and July 2020 – an increase of over 50% compared to 2019’s usage figures.
Bank of England’s Real-Time Gross Settlement (RTGS) set for an overhaul
IT consulting firm Accenture has been appointed by The Bank of England to refresh the UK’s real-time gross settlement (RTGS) service.
Victoria Cleland, the BoE director for payments stated: “The renewal programme is a key priority not just for the Bank but also the wider UK payments industry. It will support a resilient financial system that protects the UK’s financial and monetary stability in the years to come. The renewed RTGS service will be designed not only to benefit everyone in the country who makes payments, but to keep the UK at the leading edge of payments innovation.”
European Central Bank warns UK financial institutions of losing access to EU markets
Many payments businesses and banks based in the UK have moved part of their operations to set up hubs in Europe, preventing them from losing access to European markets overnight.
For financial institutions who haven’t yet made the move, if no agreement is reached on Brexit, these firms could find themselves unable to serve their EU clients. With this in mind, regulators in Europe have warned UK-based financial institutions to begin to relocate staff to their European Brexit hubs in the coming weeks, before a possible second wave of the coronavirus prevents them from doing so.