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Payment solutions no longer in focus of FinTech innovation

If you were thinking about kick-starting that payment business of yours this year, you might want to think twice.

According to new market research, payment solutions market has reached a maturity point, and new start-ups are looking at new areas of focus.

Those new areas are mostly the investment management industry, which now 'leads the pack', according to Startupbootcamp and PwC.

Their report, “Accelerating change: London FinTech 2015 - 2016”, looks at key trends in the financial technology industry (FinTech), both current and upcoming.

Explaining why innovations in the payment market are dying down, the report says volume is the biggest obstacle.

“A viable payments business requires a very large volume of transactions, and both payers and payees are drawn to payment solutions that have the biggest scale and reach,” it says.

However, at the Startupbootcamp’s FinTech London accelerator programme, more than half of the final cohort (five out of nine) had the investment management industry in their sights.

“The heart of the FinTech problem often lies in the inherent culture of ‘slow and steady’ found in large financial corporations and success will come from incumbents and startups working together,” said Steve Davies, UK and EMEA FinTech leader at PwC. “Companies should focus on what they do best and then work with relevant FinTechs for innovation to support their strategy.”

The report also looks at blockchain, saying the hype hasn’t brought concrete results, except for Bitcoin. However, blockchain won’t be leaving any time soon.

“FinTech startups emerged because they felt that there was a lack of innovation within the industry and so decided to try and solve the problems themselves by utilising new technologies,” commented Nektarios Liolios, Co-Founder and Global CEO, Startupbootcampe FinTech and InsurTech.

“The financial services industry is slowing waking up to the inevitability of change around it and regulators are looking to facilitate, rather than hinder, the disruption. There’s still so much work to be done and neither financial institutions nor startups can do it alone, the key will be to work together.”