More UK financial institutions are targeting acquisitions and partnerships with FinTech firms to boost their market position, a report from Lloyds Bank has found.
According to industry body Tech Nation, UK FinTech firms received $4.6 billion of venture capital investment in 2020, making the UK the top FinTech market in Europe and the second top globally.
Almost half (46 per cent) of UK financial services firms say they plan to grow investment in FinTechs through acquisitions and partnering in the next year, compared with a third (32 per cent) in 2020.
Developing new products and services (66 per cent) was the biggest driver of firms’ FinTech activity, followed by improving client experiences (53 per cent) and driving growth (49 per cent).
Three quarters (77 per cent) of senior leaders said technology, automation and digital investment is a top strategic priority for the year ahead.
Firms said their main technology investment targets are the cloud (83 per cent), APIs (77 per cent) and data science, including machine learning and artificial intelligence (69 per cent).
More than a third (37 per cent) are also prioritising investment in blockchain, up from a quarter (27 per cent) in 2020.
Steve Everett, head of payments and receivables for client products at Lloyds Bank Commercial Banking, said: “The UK has one of the most vibrant FinTech communities in the world, by partnering with them the UK’s largest financial firms are showing they are committed to developing new products and services to meet changing client needs through collaboration.”
The findings are included in Lloyds Bank’s latest annual Financial Institutions Sentiment Survey, which gathers views from 111 major banks, asset and wealth management firms, insurers and intermediaries, both in London and across the UK.