In the Digital Finance Forum’s second annual survey of fintech founders, 90% of respondents have cautioned that firms will struggle to raise finance in the coming year.
The survey of over 100 founders cited COVID-19 as the cause of the potential finance challenge.
Among other findings were that over two-thirds of respondents don’t believe their voices are heard in UK policy and regulatory circles.
Unsurprisingly, COVID-19 dominated the agenda. The survey found that half of the respondents received some form of government support during the pandemic, two-thirds of which were under the government furlough scheme.
Despite COVID-related challenges, it wasn’t all bad news; more than one-third believe the pandemic has increased the speed with which digital transformation and adoption projects progress.
The overall sentiment was that there is now an appetite for ‘COVID-proof’ business practices, of which fintech is a key part.
Founders were clear that a big focus this year is in the challenges of securing investment with many proposing a review of the current Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS).
The current EIS/SEIS schemes were criticised for their exclusion of the financial services sector; many founders in the sector are reported to believe that lifting this exclusion is a way in which to stimulate investment in the sector.
Among other things the industry would like to see, some respondents proposed the introduction of a Minister for Fintech, such as is seen in Australia. The introduction of such a role in government is believed to be an effective way to improve engagement between the industry and government.