Market Trends of Europe Fintech Industry
Favourable Regulatory Landscape is Driving the European Fintech Market
In Europe, regulatory tailwinds have helped transform the continent into a hotbed of fintech activity. Open banking and PSD2 have enabled the rise of challenger banks and middleware data players and have also been leading to market consolidation. Open banking, payments, and transaction banking are the top three areas of development in the European Fintech ecosystem.
Over the last few years, the European fintech scene has seen significant expansion. Open banking is one of the main drivers of this expansion. As a result, financial institutions and fintech are collaborating to provide consumers across Europe with more creative, user-friendly products. According to EY's Global FinTech Adoption Index, European customers are receptive to the idea of non-financial players selling financial solutions. Fintech adoption across Europe, particularly in nations like the Netherlands, the United Kingdom, Germany, Sweden, and Switzerland, is significantly above the global average of 64%, according to the survey.
Hometrack, a provider of insight and intelligence to the UK mortgage market, appointed Moneyhub, the Open Finance data, intelligence, and payments platform for customer-centric organizations, as its preferred Open Banking partner. The integration of FinTech Moneyhub's Open Banking technology into Hometrack's Credit Risk Hub will facilitate streamlined mortgage journeys for lenders, brokers, and consumers alike.
The United Kingdom has Dominated Fintech Funding in Europe
The United Kingdom has long dominated fintech funding in Europe and globally. It is second only to the United States in terms of investment in space, with its fintech getting another small boost from the country's Government's Future Fund scheme.
Nonetheless, the UK's lead in Europe narrowed last year. Germany, Sweden, and France have all seen a record year so far and are now gaining on the UK, according to Dealroom data. All three countries saw much larger increases in funding than the UK last year.
Moreover, the United Kingdom made up 53% of Europe's fintech funding in 2019, with 41% until June 2021. The United Kingdom's fintech share is valued at nearly USD 40 billion, followed by the Netherlands.
The United Kingdom is expected to remain a key financial hub in Europe and an attractive platform for start-ups as it has a good trade relationship that it has with the United States and other Asian fintech hubs. Fintech landscapes are likely to change, and the extent of this change will heavily depend on the outcome of the current negotiations.
