The fintech landscape has exploded in recent years and continues to gain traction. In 2016, investments in fintech globally reached approximately $25.8 billion.
Driven by advancements in mobile technology, changing customer expectations, and increasing support from governments and regulators, fintech contributed £6.6 billion to the UK economy last year.
Earlier this month, KPMG released The Value of Fintech report, which unearths the impact of the fintech industry – not only in the financial services sector, but in other aspects of the economy.
Commissioned by the City of London Corporation, the inaugural report features Trulioo as a stalwart of the identity verification industry. Seeking to demonstrate how fintech will continue to open doors and advance financial inclusion for the underbanked, the report highlights how Trulioo helps businesses manage risk and states that with “reliable data and advanced technologies, the process of identity verification can be automated during customer registration or checkout to further reduce fraud.”
The report emphasizes the growing importance of electronic identity verification. As eCommerce and merchant economies continue to flourish, merchants are faced with an onslaught of customer verification challenges. In order to protect businesses from involvement with fraudulent activities and to ensure they meet necessary regulatory requirements, RegTech solutions are providing much needed comprehensive identity verification services.
Building on a range of sources – including KPMG’s Pulse of Fintech report, government agencies and capital providers – this report provides examples of how fintechs can enhance the role of financial services providers. Suggestions include; improving financial inclusion, enhancing the customer experience, increasing transparency, improving security and compliance and providing support and guidance.
Focusing on the six components that together make up the fintech ecosystem – market, capital, government, regulation, talent and infrastructure – The Value of Fintech points out that while fintechs deliver significant value to end customers and the wider financial services market, there are emerging risks that need to be mitigated. These risks include but are not limited to; data privacy, cyber security and financial stability. On the other hand, it also advocates for players in the financial services ecosystem to work together to also help mitigate these risks, by obtaining support from government and regulatory bodies as well as from the fintechs themselves.
In its conclusion, the report suggested actions for the UK Government, the financial services industry and the wider fintech ecosystem to help promote and position the UK as a global fintech hub. Some recommendations include establishing procedures to support fintechs on regulatory requirements, identifying enablers of fintech growth and supporting fintech partnerships with incumbents.