The financial sector has had to adjust quickly to the rapidly changing landscape that Fintech innovations have brought. None more so than the established, older organizations who are having to look at new ways to do business so as not to get left behind. In the UK alone, Fintech generates revenue of £6.6 billion per year with an estimated 1600 Fintech firms in the UK currently. This figure is expected to more than double by 2030, according to a report last year from the Department for International Trade. Technology has always been a driver of innovative ideas, so it is no surprise this has changed the way finance is dealt and experienced by consumers all over the world. So, what are the advantages of the Fintech innovations that have led to so much investment over the last few years?

A key aspect of Fintech is with each innovation comes a potential reduction in cost, not just for businesses, but for the consumer as well. An example is UK fintech firm Cashplus, who with their Payments API (Application Programme Interface) innovation, have been able to potentially save companies 50% on transactions costs normally associated with the banks. This could mean £500 million in potential cost savings overall as the product can process simultaneous payments, saving time and money. With algorithms becoming more and more intelligent and able to judge things like lending risk more accurately, the automation of many processes means less of a physical presence is needed.

With speed innovations come the need for tightened security protocols, and Fintech innovations have had their influence on this too. Reports suggest that UK businesses are the main loser – at a cost of around £21bn per year – when it comes to cybercrime due to the levels of intellectual property theft and espionage. In the financial sector, these costs reach just under £2.5 billion per year,  highlighting the need for better security. One emerging innovation that follows the lead from the rise of smartphones using the technology, is biometric authorization. Being even more secure than a PIN, using your fingerprint to authorize payments and transactions is the next step in securing digital-only transactions in the future. Both Visa and Mastercard have trialled biometric bank cards in the last year and the signs are positive for future, widespread use.