Fintech 3.0 hopes to maintain the UK’s position as a fintech global leader. It is built on digitisation, automation, and platforming and is continuously bringing new opportunities for both incumbent banks and fintechs.

Welcome to blockchain

An increasingly digitised world has seen cryptocurrencies take the world by storm, with cryptocurrencies and blockchain in e-commerce affecting online businesses across the globe. Due to the pandemic, we have now seen accelerated trends such as online payments, and it’s clear these trends aren’t slowing down.

When you look at which sector will see the impact of blockchain first, from discussions we’ve had, it’s clear financial services are already experiencing the transition within their businesses, which raises the question about the future of fintechs.

For us to look at this, we need to understand how the rise in the crypto world is making its impact and changing the way we buy. We’re seeing a fundamental shift that’s driving all the growth in fintech. The key thing is how blockchain and cryptocurrency are impacting the traditional finance world, which ironically isn’t a currency. The term crypto means cryptography, which is basically the encryption of the blockchain.

Despite the UK not being in a full lockdown for quite some time, the rate of online payments and e-commerce has remained at lockdown levels, suggesting consumer habits have permanently changed. Another pattern we are also seeing is a huge change in fintech and crypto funding, with the number of crypto owners more than tripling in 2021 according to

Breaking traditions

Originally, crypto was seen as something that wasn’t associated with traditional finance, with larger banks initially cautious about the emerging blockchain industry. But this has now changed, and it’s predicted we will start seeing blurred lines between traditional financial service providers in wealth management, trading and even loans and credit cards. We will begin to witness a lot of things happen that we wouldn’t usually think of as ‘traditional financial services’.

In a recent Bitwise survey, when asked “What would make you more comfortable in allocating to crypto assets in the future?”, financial advisors see insufficient regulation as the biggest barrier to greater crypto exposure. Businesses which offer solutions like equity trading, APIs and infrastructure are now going to start thinking about how they offer crypto trading infrastructure if they don’t already. Traditional financial services are going to see significant investment over the coming years as new applications and services build crypto in their own experiences.

The cost of transaction

There’s increasing awareness regarding the cost of sending a payment cross-border using the current financial system, which charges a 4-5% fee, in some places 20-30%. However, Crypto payment firms are charging as little as 0.01% and it’s far more efficient. Blockchain also offers instant finality or finality within minutes, which basically means that it’ll be in the merchant’s bank account in a matter of minutes, rather than 15 days, which ultimately is game-changing.

Looking to the future, as more regulations are rolled out, it will be interesting to see how blockchain and crypto are shaped as they move into mainstream acceptance. Our lives are becoming more digital, and the possibilities are growing and paving the way for the future. We will begin to see emerging trends such as crypto-first platforms like SorareSorare, a blockchain-based fantasy football platform which raised $680m in Series B funding in September 2021, and that’s only scratching the surface, with more of these trends expected to rapidly become more common.