How Fintechs in the UK are Disrupting Traditional Banking Using Tech and AI 

By Oluwasekemi Akinbo

A recent study by Mardov Intelligence revealed that the UK fintech market is projected to grow from approximately $14.74 billion in 2024 to $24.06 billion by 2029, a compound annual growth rate of 10%. This number makes one stop and ponder. Are Fintechs taking over the banking industry in the UK? Considering the convenience they bring to customers, it won’t be a surprise if they are. Fintechs leverage technology and AI to provide faster, more accessible and cost-effective financial services, delivering convenience and customer-centric solutions. This article will discuss some of the key solutions fintechs in the UK provide, thus revolutionising the UK banking sector. 

Mobile Banking

Think Monzo. Revolut. These top mobile banking platforms allow customers to open and maintain bank accounts online or on mobile applications. Mobile Banking is one of the most thoughtful and widely known solutions that fintechs bring. It makes banking easily accessible to younger demographics and tech-savvy users. In 2024, Revolut’s customer base grew from 38 million to 50 million globally, and the company’s net profit increased from $7 million to $428 million. By May 2024, Monzo also doubled its business customer base to 450,000 clients, 20% of which came from London. These statistics indicate that people are moving from traditional banking to mobile banking.

While the UK’s financial inclusion rate is quite high, mobile banking further pushes boundaries by serving underserved groups, small businesses and gig economy workers. For instance, platforms like Tide provide tailored banking and business accounting solutions, particularly for SMEs in the UK. According to Tide, they serve over 10% of SMEs in the UK, boosting the functionality of their business operations through simplified financial management solutions. From company registration to corporate account opening and tax calculations, Tide delivers everything a new business needs to set up and operate effectively. 

Securing loans is also easier with mobile banking solutions. Fintech lenders like Zopa, Funding Circle, and OakNorth use technology to streamline loan approvals, often disbursing funds within 24 hours. This is a breath of fresh air from traditional banks, where customers have to go nto the bank, endure queues, go through long processes and documentation, and wait for days before the loan is approved or disapproved. 

Payments Made Easy 

With the rise of online shopping and online marketplaces, came the need for effective payment gateways. Digital wallets such as PayPal, Wise, and Apple Pay dominate this space in the UK payment space, enabling seamless online payments and other transactions across borders. In 2023, PayPal was recognised by 95% of UK consumers, making it the most recognised digital payment provider in the country.

Klarna has redefined how UK consumers approach retail purchases, by providing a buy-now-pay-later model for online shoppers. It is now a leading payment option on platforms like Temu, Aliexpress and Shein. Wise (formerly TransferWise) also exemplifies innovation by offering low-cost international transfers.

These solutions are valuable for businesses and customers alike. They encourage people to shop online, thus pulling traffic for online marketplaces. Customers also enjoy convenience by shopping and paying from their homes: a win-win for all.

The Future of Banking in the UK

The fintech revolution has undoubtedly transformed the UK’s financial landscape. Traditional banks have responded to this revolution by also digitising their services, launching mobile apps, and collaborating with fintech startups. Lloyds, Barclays, and HSBC now offer features such as quick account setup and instant transfers, bridging the gap between conventional and digital banking. HSBC, in fact, recently launched a mobile money transfer and travel spending app called Zing. Users of Zing can hold balances in over 20 currencies, send money fee-free to over 30 countries, and use a Zing Visa debit card or connect to Apple Pay/Google Pay.

Thus continuous growth and collaboration between fintechs and traditional banks could define the future of UK finance, driving inclusive, efficient, and accessible financial solutions for all.

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