R&D spending in UK financial services sector soars 19% over last three years to £690m as fintech revolution continues to disrupt traditional banking.
R&D spending in the UK financial services sector has soared by 19% over the last three years to a total of £690m in 2019, up from £581m in 2017*. This increased R&D expenditure comes as the fintech revolution continues to gather pace and traditional players invest heavily to cater to changing consumer demand, according to research from Glint Pay, the London-based fintech that allows customers to use gold as an everyday global currency.
The annual R&D expenditure has also risen by 124% over the last 10 years, up from just £308m in 2010.
Glint Pay explains that changing consumer demand for convenient, mobile banking and the success of fintech has driven traditional financial services players to scale up investment in R&D to claw back market share from more innovative disruptors.
In the recent Spending Review, the Chancellor pledged £15bn for R&D funding next year to increase the productivity and international competitiveness of its innovative firms.
Jason Cozens, Founder & CEO of Glint Pay, says: “Traditional financial services institutions can no longer simply rely on their heritage to attract and keep hold of customers. We’ve seen dozens of disruptors enter the sector in recent years and completely overhaul the industry for the better. Rising R&D expenditure suggests the big players have taken notice.”
“Now even the most established financial institutions are looking inward to ensure they appeal to increasingly discerning consumers demanding a world-class customer experience with an innovative, secure and user-friendly mobile function.”
“Consumer appetite for the huge range of products and models now available on the market suggests that the sector has been in real need of an overhaul for years. The success of fintechs offering innovative solutions to historic-low interest rates and fluctuating markets should give the next generation of fledging FS startups the confidence they need to invest in their offering.”
The research also shows that R&D expenditure in software development across all sectors has risen by 9% in just a year, from £1,512m in 2018 to £1,647m last year. Glint Pay suggests that this rise is indicative of the emphasis that all companies, not just within financial services, are heavily focused on improving mobile apps in order to cement market share.
Jason Cozens adds: “As there is so much competition for consumers, a lack of investment in the usability of mobile platforms can have a disastrous impact on a company.”
“The financial services sector is so fast-moving that it is absolutely vital that all companies ensure that they are constantly enhancing their platforms to give them a competitive edge in an increasingly crowded and innovative market.”