Why to be cheerful about the status of the fintech market

In 2023 the top 50 UK fintech companies generated around 4.0% of the total revenues of the top 5 UK banks (Barclays, HSBC, NatWest, Lloyds, Nationwide).

-       UK Fintech: £4.2bn revenues

-       5 incumbents: £102.9bn

However:

-       The average fintech company is 10 years old, while the average incumbent is 249 years old;

-       In the last 2 years the fintech sector grew at an average annual rate of 50%, while the 5 incumbents annual grow rate was around 16%.

Meaning:

-       The financial service market in the UK is healthy and expanding, considering that the incumbents continue to grow in double digits, despite the competitive fintech sector;

-       It will take some time for the fintech companies to achieve relevant scale.

But if we assume that for the next 10 years the fintech sectors will grow at an annual growth rate of 40% and the incumbents at an annual rate of 15%, the fintech sector will represents around 30% of the total revenues of 5 incumbents compared to the current 4%.

A lot of reasons to be cheerful about the UK fintech market.