Analysts of the Peel Hunt investment bank are convinced that the financial technology industry will actively develop.
The bank’s specialists compared the evolution of the financial technology space with the evolution of the company dot.com , which survived the crash in 2000. Analysts called fintech the new Internet. They are convinced that the burst bubble of 2022 is not a sign of the industry’s hopelessness or a signal of its total decline.
Analysts say that the situation in 2022 helped to abandon inefficient business models and made it possible to reveal the stability of other vendors in a practical way, which are aimed at increasing profits.
Gautam Pillai and Advika Jalan, analysts at Peel Hunt, believe that the decline in the level of trust in fintech is an example of short-sightedness in assessing long-term prospects. They emphasize that the Internet, before reaching its current scale of presence in a person’s life, was going through difficult periods, but the prospects of the very essence of the phenomenon eventually led to an era of prosperity.
Analysts note that Internet companies such as Amazon, Meta, and Alphabet account for a significant share of Nasdaq. In their opinion, the current cost-of-living crisis will provoke more active use of fintech opportunities. Analysts are convinced that over the next ten years, this industry will gain weight in terms of the scale of distribution and application. In this context, they compare fintech to the Internet.
There is an extensive fintech ecosystem in the UK, which includes more than 2,500 companies. But only a small part of these firms are present in the public space. Peel Hunt suggests that fast-growing startups will soon appear in B2B, embedded finance, open finance, and RegTech.
Specialized fintechs focused on specific verticals, customer groups and functions may begin to dominate their niches and use this state of affairs for activities in related fields.
Gautam Pillai and Advika Jalan say that the UK #fintech business case is characterized by a significantly better value proposition, greater market opportunities, and the ability to become a dominant player in the field. This specificity is the basis for accelerated growth. Analysts assume that growth will be sustainable in the long run. This assumption takes into account the huge scale of the potential activities of fintech companies.
Analysts note that the best way for public investors to gain access to innovative, fast-growing private fintech in the UK was a special venture fund Augmentum Fintech. They also positively evaluate Alfa Financial Software, Eckoh, Equals, Eurowag, Boku, and Network International.
As we have reported earlier, BNP Paribas Invests in Fintech.