UK financial services sector poised for a tech ‘Big Bang 2.0’ in 2024

The UK’s financial services sector appears to be on the cusp of a tech revolution in 2024, reminiscent of a tech ‘Big Bang 2.0′, according to Demica, a market-leading fintech powering the trade finance programmes of the world’s largest trade banks and corporations.

This Big Bang is expected to propel financial innovation to new heights and signal a wave of transformative products and services. Maurice Benisty, Chief Commercial Officer, at Demica, explains:

“While the promise of a fintech revolution has been talked about for some time, a confluence of factors is driving an unprecedented pace of change right now.

“Within the financial services sector, there’s a growing awareness that major banks are operating on ageing technology that’s at least 15 years old and is now approaching the end of its operational lifespan. In this context, stark decisions must be made.

“While the buy vs build debate raged as banks emerged from the global financial crisis, that question has now largely been settled. Where banks are modernising their solutions the vast majority are choosing to source strategic partners rather than build technology themselves. This is particularly clear in areas of significant growth, such as the $1.2 trillion supply chain finance market. Collaborations with fintech companies offer banks a gateway to a new and improved range of products and services, a vastly improved customer experience aligned with modern demands, as well as heightened efficiency and security. The mounting demand for change has also become a catalyst for banks to streamline their often frustratingly protracted procurement cycles, which have previously hindered fintech innovation.

“The financial landscape is being reshaped by major government-backed initiatives too, including open banking and open finance in the UK, and the EU’s Framework for Financial Data Access. These initiatives are not only driving the digital transformation of all banking operations but also fostering the creation of innovative services through partnerships with the fintech sector.

“We’re now witnessing swift and dynamic collaborations forming among diverse organisations, as digitally-savvy businesses and consumers alike increasingly seek greater choice in products and services. With regulators promoting easier provider-switching for individuals and businesses, the era of lifelong relationships with distant financial institutions is poised to give way to a more agile and interconnected landscape with experience and value at its heart.

“One of the UK’s largest banks, Lloyds, is embracing the power of digital tools to improve customer experience. The Trade & Working Capital Products team at Lloyds found that since switching to the Demica supply chain finance platform, they have reduced the time it takes for a supplier to join a programme from 45 days, to just one. These sort of practical changes not only make the bank more efficient, but drive huge improvements in customer satisfaction.

“These changes won’t be confined to narrow transactional banking services alone. Expect to see synergies across a broad spectrum of financial domains, including personal credit, business lending, supply chain finance, mortgages, insurance, financial advisory, investment management, forex, and even telecommunications and utilities. For instance, Mastercard has already forged a partnership with supply chain finance solutions provider Demica, combining vast scale and network reach with advanced, purpose-built technology and specialised market capabilities. This strategic alliance has extended Mastercard’s service offerings, granting business customers enhanced access to affordable working capital— a compelling glimpse into the rapidly unfolding future.”

About Lisa Baker, Editor 2419 Articles
Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.