Banks need to be more agile to compete with London’s Tech City startups

Closer collaboration between Silicon Roundabout’s technology startups and the banking sector is set to occur, according to a new report by Accenture.

“The Future of Fintech and Banking” found that investment in tech firms in the UK and Ireland has already risen from $264 million (£176 million) in 2013 to $623 million (£419 million) last year. Europe as a whole saw Fintech investment increase by 215 per cent over the same period.

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According to International Business Times, Accenture’s managing director Julian Skan believes that the Fintech industry could be both enabling and disruptive for the financial sector.

"The massive investment in fintech shows that the digital revolution is well advanced in financial services, and it is both a threat and an opportunity for banks," he said. "Fintech is empowering new competitors and start-ups to move into parts of the banking business but, paradoxically, it is also helping banks to create better, more convenient products and services for their clients.

However, the Accenture report also found that some established banks are struggling to adopt new technologies. During a survey of 25 senior banking executives, 72 per cent revealed that their banks had a fragmented approach to digital innovation, while 40 per cent felt that their company was too slow to implement new technologies.

London’s Tech City has proven hugely successful in reviving the capital’s economy following the economic downturn of recent times. Almost 32,000 new businesses have been created in the area, creating more jobs than those lost in the financial sector.

The UK’s technology industry is due to overtake financial services as the country’s largest sector, and Accenture claims that banks must become more agile and receptive to change if they are to compete.

Accenture’s group chief executive of financial services Richard Lumb believes that banks will have to adopt new technologies or risk being left behind.

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"The leaders recognise that digital goes far beyond channel and process innovation – it dissolves industry boundaries and provides opportunities for new business models and competitors, and banks have no choice other than to innovate to remain relevant to their customers.”