Doom, Gloom or Boom? Latest Survey Forecasts Sunny FinTech Future

In the current climate of hyper-vigilance, many commentators note a couple of data points and then extrapolate wild conclusions: an uptick means all is well, a bad moment indicates a gloomy end. A more measured approach comes from Accenture – whose full survey of contemporary FinTech health is well worth a read.

Despite the global coronavirus pandemic, FinTech funding saw a slight uptick in the first half of 2020 compared to the same period in 2019, according to an AltFi report of the new research from Accenture.

Fintech investments were up 3.8 per cent in the first half of 2020 to just over £2bn, up from £1.9bn in the first half of 2019.

The slight increase can largely be attributed to a surge in investment across insurtech and payments startups,  data from CB Insights. analysed by Accenture.

Investment in insurtech saw the largest increase, increasing by 66 per cent from £97m in 2019 to £161m in 2020 and payments-focused fintechs followed, seeing a 5.3 per cent increase on 2019 to £760m.

Tom Graham, a managing director in Accenture’s banking practice and its UK fintech lead, said: “While overall investment may look positive in light of COVID-19, where that investment is going reflects the current environment and we expect to see the pandemic bite in the coming months.”

“Investment surges in areas like payments signal backing for the fintech ‘beneficiaries’ in the pandemic – start-ups who offer technologies that support long-term societal shifts driven by COVID – like digital ways to pay.”

Accenture’s analysis also showed that investors favoured later stage ventures in the first half of 2020, compared to the first half of last year.

Historical Performance And IFISA Process Guide

  • Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). 

That figure is the result of over £21 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.

  • Money&Co. has been lending for over 5 years and has only had two bad debts so far, representing a bad debt rate of 0.03 per cent per annum.

All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.

So here’s our guide to the process:

  • Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
  • Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
  • Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.

The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.

Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.

Risk: Security, Access, Yield

Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.


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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.