What is the impact of digital transformation on fintech?

Fresh analysis of four years of data from Visma | Onguard’s Fintech Barometer,  shows that the number of organisations planning to undertake a digital transformation strategy within the next 6 to 11 months has more than doubled from 17% in 2019 to 35% in 2021.

The Fintech Barometer is an extensive annual survey of financial professionals, which has now been conducted in the Netherlands and the United Kingdom for four consecutive years. In it, financial professionals answer questions about payment behaviour, the application of fintech, which technologies they expect to see a lot of and the pace at which their organisations are actually managing to embrace that technology.

The effects of digital transformation on the fintech industry 

The use of fintech largely depends on how the company’s digital transformation is progressing, according to the study. In the Netherlands, digital transformation is almost commonplace; 53% of organisations are currently undertaking the process, while 10% expect to start in six months and 4% in one to two years. In the United Kingdom, the pace is slower. Currently, less than a quarter (24%) are in the process, 35% expect to start in six months and 24% in one to two years. 

When reviewing the top technology trends being recognised by finance professionals over the four-year period, AI has risen to the top for finance professionals, with almost half (47%) of organisations identifying it as one of the top three technology trends set to impact the sector, up from 31% in 2018.

With this, the ability to analyse data is a growing requirement for finance professionals, rising from just over a third (37%) recognising the need for this skill in 2020 to almost half (44%) in 2021. 

What does the future hold for fintech? 

Looking to the future, the use of blockchain technology is set to form the next step of the fintech revolution, as almost two-thirds (65%) have either adopted the technology or worked out the first ideas for future adoption, up from half (51%) in 2018.

Together, these findings point to finance professionals increasingly recognising the need to adopt digital transformation strategies and transformative fintech software, particularly in the wake of the COVID-19 pandemic and the myriad of challenges it created. This is evidenced by fewer financial professionals saying they are now resistant to change (15%), compared to 2019 levels (23%).

“Four years ago, nobody could have predicted the kind of world we’d be living in today, and our findings have really demonstrated just how much of an impact the challenges of the last year have had on the attitudes of finance professionals towards issues like innovation and fintech. This translates to a growing trend towards digitisation, data-driven insights and a growing revolution in fintech adoption, with more organisations enthusiastically undertaking digital transformation initiatives within shorter timeframes than in previous years. We expect this to continue over the coming years and as always, we’ll continue to monitor progress,” said Raymon van Viegen, CFO at Visma | Onguard.