You know what Financial Technology is right? Well, if you don’t, it is merely a term that is used to demonstrate any technological solution that is built for different areas of financial services like mobile payments and online banking.
That aside, the advancement of FinTech in Europe has helped in the further growth of different markets and not just the financial sector. This growth can be noticed in the constant development of alternate finance, peer-to-peer lending, robo-advisors, automated investment management and loans, and crowdfunding.
The Transformation of the Financial Technology Market in Europe
FinTech had continued to evolve right from when it was introduced over 65 years ago, but this transformation has recently intensified. This is due to FinTech start-ups trying to reform the system of the world of finance.
Investment in the FinTech sector within Europe grew throughout 2017, giving a total of approximately $4.7 billion. But, Europe has continued to mature and focus more funding on the development of the current stock. So, what does the FinTech market in Europe look like?
Factors Contributing to Europe’s FinTech Market
Development of leading companies, investments, consumer perspective of the Financial Technology sector – there are many things that have played one part or the other in taking the FinTech Market in Europe from where it was decades ago, to where it is presently. Let’s take a look at some of these factors and how they have contributed to the FinTech market:
Funding of FinTech Start-ups
Results show that 2013 was a great year for the Financial Technology industry, and Europe just happens to be pioneering these financial innovations. Approximately $3 billion was channeled into FinTech companies worldwide during this period, which is three times more than the amount invested in the industry half a decade ago.
In the first quarter of 2014 alone, FinTech companies were able to raise about €166 million which recorded its highest level in more than a decade and more than 200% higher than the previous quarter. Reports shown by Accenture placed Ireland and UK to have about 2/3 of the total funds realized by start-ups and 53% of Europe’s rounds.
Collaboration with the Traditional Finance Sector
The traditional banking sector once considered Financial Technology as a threat, but as time has passed, there have been ways these sectors have collaborated to develop finance further. Let’s take London as an example; some financial service companies happen to be based here, and many huge banks have their global or European headquarters stationed in London. This has caused talents from all parts of the world to come together and settle in this area.
One other thing that has helped the growth of the FinTech market in Europe, especially London, is the encouraging finance and banking rules. This has attracted FinTech start-ups from all over the world.
Financial Technology’s Many Benefits
Just like the Blockchain technology, Financial Technology has evolved in many ways to include more than only mobile payments. Now we see the sector impacting on many other areas like P2P lending, equity crowdfunding, and money transfer, as well as mobile wallets.
The Financial Technology market in Europe has grown tremendously over the years, and it doesn’t seem to be relenting. With the introduction of FinTech start-ups, collaboration with the traditional banking sector, and even development of new functions, the market is set to blossom in the coming years.