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Harnessing the power of FinTech for financial services

How is FinTech transforming financial services?

FinTech is at the heart of the new digital ecosystem emerging across financial services.

Even before the COVID-19 pandemic, changing customer expectations combined with major macroeconomic forces were challenging established players and new entrants alike to leverage technology in their business models to get ahead and stay relevant. The pandemic has only accelerated these trends, putting further pressure on margins and heightening the focus on digital products, services and solutions - both for customers and financial services organisations themselves.

FinTech provides an array of attractive solutions to alleviate these challenges. While technology-related change across the industry has to date typically been pursued through two main avenues - build or buy - the emerging ecosystem is opening up a new way to deliver efficiently on growth and optimisation goals - innovation through partnership.

While the landscape is complex and increasingly crowded, we believe that there is significant value to be had for both incumbents and innovators from the careful curation of the FinTech partnerships, and significant investment and value creation opportunities for a wide range of investors.

“The right partnerships between the right players have the power to transform financial services and to deliver meaningful social and economic impact, by bringing together the capabilities of the FinTechs & TechFins with the strengths of incumbent players. Technology is making it easier for organisations to work together – partnerships will be key to embracing this change.”

Steve CaterHead of Corporate Finance, PwC UK

What is FinTech? 

We know that FinTech means different things to different people, but for us, it describes the evolving intersection of financial services and technology. It consists of a wide ecosystem of technology-driven and technology-enabled businesses ranging from established financial services software vendors to emerging digital service providers and encompasses discrete FinTech sectors such as InsurTech, RegTech and PayTech, which focus on specific areas of the financial services value chain. While one wave of FinTechs are challenging traditional service models by offering direct-to-consumer products, another wave is developing innovative solutions underpinned by modular technology platforms to deliver efficiencies across the incumbent value chain.

FinTech Ecosystem hotspots

Digital Banking

The scope of customer experience is changing. It’s no longer enough to deliver amazing journeys; financial services companies must also gain customers' trust in order to differentiate. Brands are starting to focus on purposeful experiences to build trust amongst belief-driven consumers and drive customer engagement.

These purpose-driven experiences are meaningful and pleasurable in addition to satisfying the 'table stakes' of a top-class experience (convenient, usable, reliable, functional). They are the basis upon which strong customer advocacy can be developed.

To do this successfully, banks need to be able to continuously capture and monitor customer insights to offer more personalised products and experiences. FinTech brings a more direct way to engage customers in developing beautifully designed and engaging interactions, alongside the core technology that is required to deliver those experiences.

Contact: James Morgan


The costs of compliance and non-compliance have never been higher, both in terms of financial penalties and reputational impact in uncertain and challenging market conditions. However, despite significant investment into remediation and complying with new regulations, banks and insurers continue to struggle to demonstrate compliance in a sustainable manner. Given the cost-pressured environment and the continuing pipeline of regulation on the horizon, there is a clear business case for fundamentally rethinking the way that compliance is achieved and maintained.

Organisations need to consider their long-term architectural vision for how they meet compliance obligations across all lines of defence, not just within Compliance. Organisations need to think about how they assess and incorporate RegTech to meet their compliance obligations in the most efficient and effective way. A business case for leveraging new technologies should consider the benefits to customers and colleagues, as well as the cost benefits.

Contact: Angus Goldie


Organisations now have access to vast amounts of business and customer data. In this digital age organisations must find ways to transform this data to stay relevant to customers, drive strategy and target future investment. Customer data is in particularly high demand as organisations can provide insights into spending patterns and lifestyle choices. Challengers into the market are providing new ways to monetise this data, through automating processes, using alternative data points to create cutting edge products and developing cloud based solutions.

FinTechs are using data to improve internal processes of larger organisations, including onboarding and Know Your Customer (KYC), privacy and governance and data migration. By incorporating emerging technologies and partnering with FinTechs/RegTechs, established financial services organisations - including banks, insurers and wealth managers - can enhance their ability to aggregate and analyse data effectively across multiple sources, future proofing their business and complying with regulation.

Contact: Rav Hayer

Financial Crime

Combating financial crime (FinCrime) remains a key challenge for the industry and despite significant regulatory scrutiny, and effort by the private sector, there remains continued focus on enhancing efficiency and effectiveness.

General recognition is that current processes are overly manual and burdensome on already over-extended resources. High levels of false positives and other redundant activities are leading to backlogs and impacting risk coverage. Technology, cross/converging criminal threats and a rapidly changing regulatory picture demands a new response. 

Organisations are exploring new innovative technologies to better identify risks and improve efficiency. FinTech solutions are emerging to tackle some of the key issues the industry is facing, this includes: 

  • Utilising more diverse data pools to provide a more holistic view of the customer behaviour across all financial crime types
  • Using graph analytics to identify hidden relationships and complex collusive behaviour
  • Use of models that continuously learns and updates to detect unusual activity in addition to rules that target specific risks
  • Use of artificial intelligence to replicate complex human decision-making during investigation to increase operational efficiency
Contact: Scott Samme , Graham Ure


Disruptive trends and technologies create imminent opportunities for the insurance sector. Insurance is predicted to be disrupted to the tune of c.£50bn of revenue in the UK market alone. Innovative Insurtech companies have set the stage to begin delivering significant value in this disrupted environment, having the potential to change insurance for the better for both customers and people working within the industry. 

We are moving closer to wider ecosystems and a platform economy, designed to meet the customer needs in a single place. We are seeing a response in both new entrants and new products/services, such as distribution models, Insurtechs/Banks collaborating to enable a better experience for customers. This means that insurers will need to adapt more quickly to these changing market dynamics. An ability to respond quickly to new insights from different data sources, to release new features in the market to amplify the customer experience, and integrate new insurtech capabilities to enhance the value chain, will be critical to remain competitive. This will require a revised strategic focus and culture on innovation and experimentation, and structural changes to drive great enterprise agility.

Contact: Glynn Austen-Brown


Customer behaviours are being shaped by digital technologies such as eWallets and contactless cards as preferred methods of payments, a trend which has been accelerated by COVID-19. The regulatory opportunity created by Open Banking is encouraging new market entrants to develop innovative and convenient payment experiences at a time when smartphones and tablets are becoming the preferred method for banking and insurance.

We see demand for FinTech related services in areas such as digital banking and wealth management opening new opportunities for revenue generation as well as cost reduction. New players are using digital-only models to reach all segments of society and at the same time, traditional players are looking to FinTech to reduce operating costs and find more cost effective ways to comply with regulatory mandates.

Contact: Jon Maskery


Contact us

Peter Hewlett

FinTech Leader, PwC United Kingdom

Tel: +44 (0)7483 356243

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