Six-in-ten UK financial firms believe that up to 40% of their revenue could be lost to standalone fintech firms

According to a new report from PwC, which surveyed more than 1,300 financial service leaders worldwide, 61% of UK financial service industry leaders believe their revenue is at risk, compared to 51% of financial service leaders globally.

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Perhaps to combat this, 47% of UK firms claim they plan to acquire fintech companies over the next three to five years. 81% state they plan to initiate strategic partnerships with fintechs over the same period.

However, UK financial services firms currently only dedicate 9% of their annual turnover to fintech and IT projects, below the global average of 15%.

Over a third (39%) plan to invest in cyber security while 77% want to invest in data analytics.

Whether this is too little too late remains to be seen, but 92% of UK incumbents believe that consumers use fintech to conduct payments, 81% say it is already used for personal finance and 72% for funds transfers.

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Steve Davies, EMEA fintech leader at PwC, said: “The financial services industry has embraced fintech to help drive change and innovation. Fintech collaboration, and innovation more widely, is not about jumping on the latest bandwagon – it’s about finding the best, most efficient way to deliver your business strategy and ultimately better serve your customers.

“The UK’s financial sector seems to have a more realistic understanding of the long term returns on targeted investments. Managing expectations around returns is important, particularly for firms facing significant cost pressures.”