Fintech buyers plan to expand their list of purchases at higher ticket prices.

The top five areas for investment in tech purchases are insurance (25%), credit (22%), core banking (21%), artificial intelligence and machine learning (20%) and payments (19%).

Around 34% of buyers want revenue-boosting solutions, while 33% want to integrate third-party services more easily into their propositions. Another 31% intend to allow third-party services to be more easily integrated into their proposals.

The report is based on a survey of major banks and fintechs across five European markets. The findings show a shift in focus regarding products and services in the context of macroeconomic turbulence and a cost-of-living crisis.

“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.

Concerns in fintech investment

However, buyers are reluctant to engage with providers for various reasons. Around 31% say lack of awareness among industry analysts drives down the appetite for engagement. Another 29% blamed a lack of news coming from the supplier, while 28% said a lack of online information about the supplier would prevent them from seeking engagement.

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“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”, Lowther pointed out.

Fintech investment declined globally in 2022, according to GlobalData’s “VentureView: Banking & Payments Investment Activity Q4 2022” report.

According to the report, the fintech sub-sector recorded a 49.8% fall in deal value, dropping from $68.56bn in the final quarter of 2021 to $34.66bn in the last quarter 2022.