Fintech awareness is surprisingly low in the UK

BI Intelligence

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Despite the high number of UK consumers who use financial products and the extent of financial services penetration in the country — 91% of people across the UK have a current account, and 67% use contactless payments at least once a month — awareness of fintech services in the UK remains low, according to a new survey conducted by The Telegraph.

Among other findings, the survey revealed that 80% of UK consumers (in a sample of 500) were unaware of the term "fintech."

The survey shows that customer engagement with fintech remains lackluster in the UK:

• Awareness of big fintech brands isn't widespread. Seventy percent of respondents told The Telegraph that they have never heard of leading UK fintechs such as Atom Bank, Curve, and Nutmeg. This is despite the fact that at least some big brands, notably Funding Circle and Nutmeg, are spending heavily on marketing. That could indicate fintechs have to accompany advertising with more fundamental education about their products, perhaps targeted at universities and workplaces, to ensure their marketing campaigns hit home.
• Adoption of fintech services is also low. Only 10% of respondents are currently using a fintech service, the survey found. This is probably a reflection of a continued lack of consumer trust in financial services newcomers: 27% of respondents said that a main barrier to using such services is concern about the security of their capital, and 18% said the protection of their personal details is a worry. It will likely take these fintechs going through a full credit cycle, and proving that they can handle operational and cybersecurity concerns, before they can convince the public of their safety.

This should be a wake-up call for consumer-facing fintechs. Business-to-consumer (B2C) players rely on amassing customer numbers to become viable enterprises. These latest figures should come as a timely reminder that, now that they have developed unique propositions, they should turn their attention to persuading people to use them.

This means not only allocating larger proportions of their budgets to marketing and customer education, but also ensuring their campaigns are targeted appropriately, and working with regulators to assuage consumer concerns about safety. However, while larger fintechs may be in a position to accomplish this task, it may prove easier said than done for the UK's larger ranks of small- and mid-sized startups.

Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on fintech profitability that:

• Explains why the profitability question is increasingly being raised.
• Outlines why fintechs in different segments are failing to turn a profit.
• Gives examples of just how large some fintechs' losses are. 
• Explores how fintechs are striving to solve the profitability problem.
• Outlines vital considerations for fintechs and their investors.

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