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FinTech Connect: majority of fintechs seek investment

Wednesday, November 20, 2024 — 12:09:19 (EST)

London, 18 November 2024: New research from FinTech Connect has found that most FinTechs (72%) are looking for investment, but a quarter have been forced to change their funding plans over the past year as they have been unable to secure investment.

This is just one of the findings from FinTech Connect’s State of Investment survey, which gauges the concerns, plans and predictions of investors and FinTechs in the UK. The research also found that 44% are somewhat concerned about the trajectory of FinTech company valuations over the past 12 months, and a quarter are extremely concerned.

Despite the uncertain investment landscape, the majority (70%) also foresee FinTech investments enjoying steady growth in the next 3-5 years, and most (67%) have a positive overall sentiment towards the FinTech sector right now.

Commenting on the findings, Laurence Coldicott, Senior Content Director at FinTech Connect said: "With 72% of FinTechs actively seeking investment, it's clear that funding remains a top priority across the sector. However, our research reveals that a significant portion has had to alter their investment strategies due to challenges in securing funding over the past year. These findings underscore the pressures on FinTechs to not only attract capital but to navigate an increasingly selective investment landscape, and it’s telling that almost half (48%) believe private equity provides the most investment opportunities within the FinTech space.”

The research has also identified several trends emerged that are expected to shape the FinTech investment landscape in the next five years, including rise of AI-driven solutions, greater regulatory oversight, increased consolidation and economic nationalism.

And while a focus on sustainable tech was also highlighted as a key trend, three quarters believe that declining investment in FinTech is impacting the industry’s commitment to ESG (Environmental, Social, and Governance) sustainability initiatives.

Despite the overall positive sentiment reported, respondents did raise concerns about several pieces of legislation, namely AML/KYC, APP Fraud and DORA.

Laurence added: “The research has highlighted growing unease among FinTechs and investors about the evolving regulatory landscape. Legislation like AML/KYC requirements, aimed at curbing financial crime, and DORA’s stringent digital resilience standards, add significant operational and compliance burdens to emerging FinTech firms. Meanwhile, the escalating risks associated with APP fraud amplify the need for robust anti-fraud measures, which can divert resources from growth initiatives. For FinTechs and their investors, the challenge lies in striking a balance between compliance and innovation in an environment where regulatory pressures will only increase."

More findings from the research will be revealed in the run-up to this year’s FinTech Connect event on the 4th-5th of December, at ExCeL, London. Each year the event attracts FinTech leaders who spend two days tackling the hottest topics and biggest challenges in the market including embedded finance, Web3, cross-border payments, investment, scaling, Gen AI, crypto, regulation, digital innovation and customer experience.

For more details, visit www.alphaevents.com/events-fintech-connect-london.

ENDS

About Fintech Connect

FinTech Connect is where large teams from major financial institutions go to assess the latest innovations on the market, and where FinTechs come to accelerate dialogues with digital buyers with responsibility across digital transformation, payments, financial security, RegTech and blockchain.

The 2024 event will bring together 2,000+ of the fintech community to share best practice, showcase new products and solutions and shape financial services of the future. The two-day conference and exhibition offer a comprehensive programme of interactive workshops, multiple fireside chats, innovative tech demos, and multiple networking opportunities.

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Source: Company press release.