The Confederation of British Industry has launched a new campaign to encourage companies to use fintech to accelerate business growth in the future.
The campaign is called ‘Winning with Fintech.’
Why is the campaign so necessary?
As businesses recover from the pandemic, they face several challenges. Any company looking to grow must manage risks and improve operational efficiency in the face of spiraling costs and supply chain challenges in an era of continued uncertainty.
Lord Bilimoria, President of the CBI, explains further, “given the broad range of headwinds facing business, from supply shortages to rising inflation and energy prices, a focus on fintech has never been more important as firms look to unlock growth and drive productivity gains.”
According to the Office for National Statistics (UK), in the first half of 2020, industries involving more in-person contact saw the most significant fall in turnover as coronavirus (COVID-19) lockdowns came into force. These high-contact industries saw a relatively more significant peak-to-trough decline in output of 37%.
There were 137,210 business closures in the UK during the first quarter Jan-March of 2022, representing a 23% increase from the same period.
There was an increase in closures in 15 out of 16 main industrial groups in Q1 2022 compared with Q1 2021, with the most significant growth coming from the transport and storage industry.
As a result, fintech represents a move towards innovative solutions for businesses, especially as they struggle to survive.
“With a marked shift towards e-commerce during the pandemic, fintech solutions – such as seamless digital payment and cash flow management tools – have been crucial to helping firms pivot operations and derive a competitive edge in an increasingly crowded landscape. With most firms, large and small, striving to digitize, both in revolutionizing their customer offer and driving organizational efficiencies, there has been a real need to employ and invest in fintech solutions to underpin this journey,” Lord Bilimoria explains.
According to the CBI, UK fintech companies received $11.6 billion in investments in 2021, increasing 217% over 2020.
Furthermore, the number of UK fintech unicorns (companies with a valuation exceeding $1 billion) doubled to 20 in the first half of the year, and that number continues to rise.
Bilimoria sees this as an opportunity, “It is viewed as a key enabler of economic transformation and operational efficiencies. CBI research estimates that the sector could capture $39 billion of additional revenues by 2030.”
How will the focus on fintech impact society and individuals?
For individual firms, the campaign’s overarching goal is to boost awareness of what fintech can offer their business and how they can work with fintech companies to better aid growth and development.
Much of the campaign will focus on raising awareness of the practical opportunities provided by fintech and how to best capitalize on them and helping firms navigate the growing market of fintech products and suppliers.
Research from McKinsey and Company indicates that businesses focusing on utilizing fintech by offering personalized experiences will translate to higher sales if businesses remove unintended barriers.
Since the pandemic, the surge in online interactions escalated expectations—giving consumers more exposure to the personalization practices of e-commerce leaders and raising the bar for everyone else.
Consumers now view personalization as the default standard for engagement from the web to mobile and in-person interactions. As 71% of consumers expect companies to deliver personalized interactions, companies have some pressure.
Lord Bilimoria points out, “with consumers facing increased cost-of-living pressures across the board, consumption-led growth is increasingly unlikely for the economy. Individuals are increasingly discerning about the goods and services they use, putting pressure on firms to innovate and personalize their offerings. Fintech is critical to underpinning this innovation, particularly in the digital space.”
For fintech companies, it’s about broadening their engagement with the broader business community to understand business needs better now and further down the line.
Through increased attention, fintech companies can better hone and refine their offer to large, small, and medium-sized companies and consider individual sectors’ specific needs and growth opportunities.
Long-term goals
So far, the CBI has received a positive response; however, there is still some work to be done. “we’re determined not to take our foot off the gas and want to reach as wide an audience possible. That means coordinating a further series of workshops and roundtables with firms across the UK.”
Nonetheless, they continue to shape the future economy in a way that works for UK businesses.
“As the voice of business in Britain, we see the value that fintech can bring to individual firms and the wider economy. We want to make it easier for firms to adopt fintech, either through providing practical advice or shaping the policy environment to make adoption easier and more cost-effective. Essentially the goal is to make fintech investment widespread across British businesses. But we also want to ensure that the UK remains competitive as it navigates economic headwinds and seizes key opportunities as they emerge. Fintech stands alongside net-zero as one of the biggest post-pandemic opportunities for the country.”
