Financial services incumbents will vie with start-ups and tech giants for £100bn prize by 2030

May 07, 2019

Technological step changes that are colliding with other macro-economic and behavioural shifts could bring a boost of more than £100bn to the UK’s financial services sector by 2030, according to new analysis from PwC.

The “Harnessing the power of disruption” report, released today, identifies key financial services areas open to - and already being impacted by -  advances in technology, changes in demographics and customer behaviour. In key areas including insurance, lending, savings and investments, and transactions, the analysis charts the “disruption” occurring and quantifies the positive impact on consumers, businesses and the financial services industry serving them.

Of the total £106bn of estimated new business by 2030, PwC estimates more than half (£53.6bn) will be driven by insurance (£49.5bn) and SME lending (£4.1bn) advances as firms operating in this area mobilise to meet changing consumer habits.

Emerging risks and new tech could drive disruption in commercial lines insurance equivalent to 25% of current revenues, leading to an estimated market uplift of £27.6bn by 2030. Disruption opportunities in the life and pensions sector could also benefit the market by £15.7bn.

Almost a quarter (24%) of the personal insurance market could be disrupted by 2030 due to the changing nature of risk and better data, resulting in a £6.6bn boost. New entrants are already capitalising on the demand for new, more customer-centric and digitally enabled services. Examples include apps supported by AI-driven digital assistants allowing customers to buy and manage their home and rental insurance policies with minimal effort.

Globally, SME’s financial needs are increasingly being met by new players such as the internet giants. In the UK, big tech or smaller digital challengers could dominate the currently underserved micro-SME lending sector, due to the better information they possess and the improved user experience they can offer. This could kickstart commerce worth an extra £4.1bn (37%) of today’s SME market.

With consumer habits continuing to evolve rapidly alongside major advances in technology, industry giants, who still hold the customer share advantage, will vie with start ups and major tech firms for the new business, the analysis finds.


Shazia Azim, Head of Strategy and COO of Financial Services at PwC, said:


“Our analysis shows an upswing of more than £100bn by 2030, if sector incumbents and new entrants successfully horizon scan evolving consumer needs across key areas including insurance, SME lending and asset management.

“FinTech presents a fantastic opportunity for financial services businesses to harness technological disruption and help shape the future of the industry. Crucially it helps level the playing field for those start ups and scale ups using and developing cutting edge technologies. As a result, these newer players will be better equipped to battle for market share with the larger firms still adapting to the rapid pace of change.

“It’s clear that firms operating in a sector where the consumer is becoming more sophisticated and more demanding will have to embrace technological disruption – or be disrupted themselves.”


Customer appetite, trust, and shifts in macro economic trends influencing customer demand for new products will drive innovation in  five key “enablers” areas, which are weighted in favour of market debutantes.


Technology– new entrants are cloud-based and put customer experience at the heart of their technology design. Contrast this with some incumbents’ reliance on legacy technology frameworks that depend on systems developed in the 1960s and are still used to support $3 trillion of commercial flows.  


Regulation -  challengers are able to create new services and attract customers onto their platforms without having to fulfil the majority of complex licensing requirements required by traditional players.  


Switching –  regulation is making switching easier and more straightforward than ever. Challengers are targeting new demographics and creating a clear distinction between old and new.


Talent  – traditional financial services roles are being replaced and augmented by automation. The focus on data and analytics is creating intense competition for digital and data-savvy talent, to the advantage of tech giants directly aiming to serve the FS sector.  


Funding - the relative size and availability of funding


First mover advantage often belongs to the big tech players or start-ups. However these groups do not have a monopoly on the creative mindset, responsive business models and transformational approach needed for operating in a disrupted landscape.

Sector incumbents can combine those attributes with their established relationships and foundation of trust, and consequently be well-placed to service their markets, PwC suggests.


Andrew Kail, head of financial services and partner at PwC, said:


“There are plenty of examples of disruption taking place across the financial services market. Traditional firms and fintech start-ups are offering consumers new ways to transact and manage their money. Illustrating the competition in the market, digital players from beyond the sector are creating financial services from scratch to produce attractive new products.


“We’re only seeing the beginning of the disruptive change that will change the face of every sub-sector, from insurance to asset and wealth management and from transactions to pensions. And for firms operating in any of those markets, tomorrow’s competition could come from anywhere.

“PwC is currently working with more than 800 UK and global businesses on financial services technology projects.

“Consumers and businesses using innovative products want more tailored, more efficient and more secure technology. In order to meet this demand we may also see more joint ventures between the behemoths and the new entrants to combine forces around market share and new product.”


The report and further information can be accessed here: 


Notes to editors


  1. The analysis was conducted during April 2019. PwC assessed each FS sector by enabler maturity and customer appetite for disruption, including how this might be impacted by macro-trends over the next 10 years.

  2. We identified the potential key drivers of disruption (e.g. new propositions or fundamentally new ways of doing business) by scanning each sector and identifying which drivers are receiving the most funding from VCs or starting to be adopted by players across the globe.

  3. The impact of these drivers of disruption were then calculated on both the potential to add incremental revenue and put 'revenue at risk' for incumbents by assessing their influence in more mature markets (e.g. the US, Asia) or adjacent industries before applying this to the UK sectors.


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