Study: 70% of European banks and fintechs to increase investment in financial technology over the next 18 months despite the downturn

Study: 70% of European banks and fintechs to increase investment in financial technology over the next 18 months despite the downturn

Buyers attracted to tech providers that demonstrate values and ethics, high-levels of governance and oversight, and a strong reputation

London, March 15th, 2023: CCgroup, the multi-award winning fintech PR and marketing consultancy, today launched research findings from “How to influence fintech buyers”, based on a survey of major banks and fintechs across five European markets. The report reveals that, despite the fintech and wider economic downturn, 70% of European financial institutions expect to increase investment in financial technology over the next 18 months.

The report explores the current economic downturn and cost-of-living crisis’ impact on the financial technology buying landscape, offering insight into what influences banks’ and fintechs’ choice of provider. CCgroup commissioned independent research consultants Censuswide to survey 251 buying decision makers (C-level executives, VPs, and Heads of departments) at major banks and fintechs across the UK, France, Germany, Spain, and Italy.

Buying landscape

Despite the challenging macroeconomic environment, fintech buyers plan to make more purchases and at higher ticket prices. There is a clear shift in focus to products and services that help both the institution and its customers navigate macroeconomic turbulence and, specifically, the cost-of-living crisis.

· Top five areas for tech purchases are insurance (25%), credit (22%), core banking (21%), artificial intelligence & machine learning (20%) and payments (19%).

· €290,000 – €570,000 was the average ticket price for tech investments, a 300%+ increase on 2020 data.

· Buyers want solutions that will boost revenue (34%), allow them to more easily integrate third-party services (33%) and, conversely, allow third-party services to be more easily integrated into their propositions (31%).

· To help their customers through the cost-of-living crisis, buyers are particularly interested in savings products (35%), credit products (35%), and loans tech (33%).

How to influence fintech buyers

Certain channels, content types and provider attributes have more influence on the buying decisions of banks and fintechs than others:

· Shortlist stage – Channels such as trade media, advertising and internal business analysts, and content such as analyst reports, news articles, and industry debates perform most strongly. These serve up a range of potential suppliers and have enough depth of information—but not too much—to decide whether to take through to shortlisting are most influential.

· Selection stage – As we shift from shortlisting to selection the channels and content of influence become more narrow. Once buyers have identified potential technology providers, they want to deep dive into that business to inform the final selection. Channels such as social media, search and events, and content such as analyst reports, whitepapers and opinion articles are the most influential.

· Attributes – Values and ethics (28%), governance & oversight (25%) and supplier reputation (24.7%) lead the table as buyers seek providers who can demonstrate they are resilient and well run, with a track record they can be proud of.

· Industry analysts – Four in 10 buyers say that 25-50% of their technology purchases involve industry analysts. Only 2% of respondents said industry analysts weren’t involved at all.

· Nearly half of buyers (45%) are only engaging with a supplier at the discovery or even the purchase stage.

What puts buyers off?

Buyers want to work with providers that have market momentum, that can evidence performance with company and technology information easily found online, and are reputable among media and industry analysts:

· Lack of awareness among industry analysts (31%), lack of news from the supplier (29%), and lack of information about the supplier online (28%) are the biggest reasons buyers would not select a provider.

· The biggest obstacles to getting a purchase over the line are due diligence on the supplier (38%), getting consensus across the business (36%), and lack of performance data and evidence from the provider (33%).

“Geopolitical and macroeconomic turbulence is driving major financial institutions to buy more technology and at higher ticket prices. However, the market is crowded with thousands of suppliers vying for the attention of a small number of major buyers,” said Daniel Lowther, Head of Fintech at CCgroup. “The biggest issue fintech providers face is that nearly half of buyers are only engaging with a supplier at the discovery or even the purchase stage. This means that firms are being evaluated from afar and selection depends on their reputation and online presence. Effectively, it’s all about the shop window.”

“To influence buyers at major European financial institutions insight is critical. Despite fintech being a $112 billion industry, quantitative data on how decision makers select technology providers is lacking. This research, and the CCgroup reports that precede it, goes some way to addressing that insight gap,” said Alexandra Santos, Head of Emerging Fintech at CCgroup. “The purchasing landscape is evolving. Increasingly, buyers are looking for technology providers that put a major focus on values and ethics, governance and oversight, and supplier reputation over the more traditional metrics like cost, flexibility, and cutting edge tech. Purpose-driven firms with strong reputations and track records that can evidence their performance are best placed to win.”

The report “How to influence fintech buyers” can be downloaded here: https://www.ccgrouppr.com/insights/how-to-influence-fintech-buyers-2/