A new report has found that digital payments are now driving growth in the UK, with a huge percentage of people seeing some form of fintech adoption.
High uptake, likely accelerated by the Covid-19 pandemic, has reached “mass” levels over the 2020/21 period. The UK saw more than 50% increase across all areas, including payments, investing, and saving.
Plaid found that the average UK user now manages around 67% of their finances through a fintech product and is expecting to increase the number of apps and services they use from 2.8 to 3.5 over the next six months.
Consumers in the US have also been adopting fintech more readily, with the country seeing a 52% increase year over year, from 58% to 88%.
Commenting on the new report’s data, Keith Grose, head of UK at Plaid, said: “This has been a ground-breaking year for fintech as the Covid-19 pandemic led people to turn to digital solutions.
“This accelerated the inevitable and now fintech has reached mass adoption faster than almost any service besides the internet itself.
“Moving forward, open banking will be a core part of digital life— and it won’t be just about understanding your finances but putting them to better use via new, digital payment methods.”
The main reason for in the increased growth, Plaid said, is that users tend to move towards fintech for “speed, ease and convenience,” as well as the benefits and positive outcomes that are “cementing fintech as the primary way of managing money moving forward”.
Previous research from KPMG’s Pulse of Fintech report found that global fintech investment has seen “incredibly strong” second quarter growth so far in 2021, with investments in the first half of the year reaching $98 billion (£70bn) across 2,456 deals.
Last year, the world saw a total of $121.5bn (£87.7bn) invested in financial technologies, including venture capital and private equity investment, as well as mergers and acquisitions.
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Scotland has seen growth in fintech companies as demand for services increases. According to figures published by FinTech Scotland in September, the number of fintech SMEs in the country has more than doubled since the onset of the coronavirus pandemic last year.
Published stats indicated that there are now 181 fintech SMEs operating in Scotland, marking an increase from 119 in March 2020.
The company said the growth reflects an increase in demand for financial technologies as the economy and society adapts to a digital environment driven by the challenges of the pandemic.
Commenting on the collected data, FinTech Scotland Executive Chairman Stephen Ingledew, said: “There is growing recognition of the valuable role fintech in contributing to the digital economy, therefore, formally bringing together a prominent group of entrepreneurs signifies Fintech Scotland ongoing commitment to ensure the best support is available for innovative enterprises in Scotland.”
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