In the first our this year’s Finance blogs, our Finance Sector Lead, Marie Portier talks about what will be driving her careers delivery plans for Students in 2020/2021…….
The uncertainty of COVID-19 and its impact on the finance sector provides an opportunity to explore subsectors that are coping well and investigate potential growth areas. Areas such as fintech, risk management, and ESG investing have already been highlighted by several reports as the most resilient. In this post, we will focus on the fintech sector, its rapid growth and how it has been positively weathering the current storm of COVID-19 better than most.
Recent research by McKinsey & Company indicated that 80% of traditional financial institutions have already developed new emerging tech initiatives since 2019 (think voice, VR, AR, AI and DLT) and new fintech investments are predicted to skyrocket in 2020 to exceed $30 billion. This is a phenomenal increase in comparison with the $1.8 billion investment in new fintech products in 2011. The biggest trends have been focusing on use of AI, data-driven development, wealthtech, the fundamental importance of execution and the need to go beyond simply having a great UX.
Has COVID-19 heavily impacted the fintech sector’s booming progress? A recent report from Beauhurst stated that 53% of the UK’s most ambitious companies are under moderate to critical threat from the pandemic but that the fintech sector is still better positioned than most to weather the current storm. Reasons behind this positive news are (1) the majority of fintechs (87%) have raised equity finance – giving them both hard cash and access to expertise and investor networks, (2) that 73% of fintechs are located in London – where there is the highest proportion of positively impacted businesses, (3) tech sectors tend to be the most resilient thanks to their high agility, innovation power and access to remote working.
In addition, the need for companies to quickly digitise seems to have accelerated the demand for fintech services and products (20% increase and growing!), with the vast majority of those affected seeing a surge in demand in AI, automation and digital ID services.
What about employment? Few jobs in the fintech sector are at risk, with only 2% of jobs immediately under threat versus 22% of jobs in the wider high-growth economy and with only 20% of fintech jobs moderately at risk. Given the increase in demand for products and services we also expect future recruitment to stay fairly stable in 2020/2021 and even potentially increase for the most disruptive and fast-growing companies (Revolut, Iwoca, Flagstone, Yapily and Transferwise amongst others).
In summary, whichever finance subsectors you are interested in, whether that’s fintech or something else, our key tip in this year of great change is to be aware of areas of growth that you can target for your future career.
In July I’ll talk more about the specific things you should be doing to prepare for Autumn term….
Marie Portier, Career Consultant