Fintech firms in the UK are more confident than those in any other sector according to our Risk and Confidence research undertaken in May ‘191. Their confidence was three percentage points above the general industry average in 2019 and is predicted remain so in 2020, when over 50% of sector leaders expect to be confident in the ability of their business to grow and prosper. In fact, fintech sits a full five percentage points ahead of any other UK sector in terms of business confidence.
This confidence reflects the fact that fintech is an enormously growing field. The Financial Times reports that $2.2bn was pumped into insurtech investment alone in the first half of 20192, demonstrating how each area of financial services has its own momentum within the overall boom.
How do fintech firms expect to spend that investment? According to our research the top three, investment priorities for fintechs will be in technology, equipment and hiring permanent staff in 2020.
But while firms have the confidence to invest in both infrastructure and people in the coming year, there is a darker side to fintech’s seismic industry changes. This is highlighted in the PWC Fintech report for 2020, Embracing disruption3. The report comments that “the accelerating pace of technological change is the most creative force – and also the most destructive one – in the financial services ecosystem today.” In fact, as they look ahead to May 2020, fintech firms rank technology as their joint second most significant risk behind economic risk, and equal to political risk. If fintech firms get technology choices wrong, they know the consequences will be significant.
CNA Hardy Risk and Confidence research – May ‘19
For fintech firms, 2020 is likely to bring further opportunities for growth, but the price will be disruption, challenges and the need to innovate to remain competitive. Confidence in this sector comes with matching risks, and insurers and broking partners will need to be ready to respond fast and flexibly in line with the sector’s changing needs.
1 CNA Hardy Risk and Confidence research was undertaken between February and March ’19, via an online survey of 1,500 business leaders of multinational firms with operations in Europe. Qualitative research was undertaken in May ‘19. In the UK 450 business leaders from 9 different business sectors, with a turnover ranging from £5m to £1bn+ were surveyed.
2 FT.com
3 PWC - https://www.pwc.com/gx/en/industries/financial-services/publications/financial-services-technology-2020-and-beyond-embracing-disruption.html.
About CNA Hardy
CNA Hardy, acting in the UK through Hardy (Underwriting Agencies) Limited and CNA Insurance Company Limited, and in Europe through CNA Insurance Company (Europe) S.A., is a leading specialist commercial insurance provider for clients within both the Lloyd’s and company markets. For more information, please visit CNA Hardy at www.cnahardy.com.
CNA is one of the largest U.S. commercial property and casualty insurance companies. CNA provides a broad range of standard and specialized property and casualty insurance products and services for businesses and professionals in the U.S., Canada and Europe, backed by more than 120 years of experience and approximately $45 billion of assets. For more information, please visit CNA at www.cna.com.