Fintech
European fintechs plan to increase business in the next year
Optimism is returning to the European fintech sector, suggests new research from MHP Group which shows that more than three-quarters of companies expect their business to grow in the next 12 months.
After a difficult couple of years for the sector, MHP interviewed more than 50 fintech leaders from the UK, France, Germany, Italy and Spain on their expectations for the future.
Confidence is returning to the European fintech sector as a whole. UK leaders are the most optimistic, with 83% expecting growth next year, followed by France (80%), Germany (77%), Spain (72%) and Italy (66%).
The most established fintechs, those more than 10 years old, are the most likely to expect growth (79%). Early-stage companies are slightly less confident, with 55% of those less than five years old expecting “significant” growth over the next 12 months.
The return of confidence in the sector went hand in hand with a renewed focus on achieving profitability, a top priority for more than two-thirds of respondents.
Attracting customers, investors and talent are recognized as the three key drivers for achieving profitable growth, with relative consistency across markets, business maturity and size.
Customer acquisition and retention are considered the top priority for 55% of fintech companies, a percentage that rises to 71% for Italian companies. Older, more mature players place more emphasis on this than smaller, newer outfits.
Securing funding from investors also features prominently, with 45% of European fintech leaders prioritizing capital injections to fuel their growth.
In the war for talent, European fintechs are not just competing against each other, but against the broader tech ecosystem, as well as those in America, Asia and the Middle East, where salaries and benefits can be more attractive. As a result, two-fifths of respondents will prioritize finding the right talent in the next 12 months.
Nick Woods, head of financial services at MHP Group, says: “The sense of optimism returning to the European fintech sector represents more than just a change in sentiment. After a challenging period, battle-hardened leaders are drawing on hard-won wisdom to guide their growth strategies.
“The heady days of cheap money and a scale-at-all-costs mentality have been replaced by a greater focus on profitable growth, signaling the dawn of a more mature approach.”