Cyber security 'greatest threat to FinTech adoption'

Cyber security has become the largest threat to FinTech adoption, according to a new report.

A survey of more than 700 senior financial services decision makers in the UK, US and Europe by law firm Goodwin found that nearly half (47 per cent) ranked cyber security as the greatest challenge to the uptake of FinTech solutions.

A majority (54 per cent) of respondents ranked data and analytics as their top priority for FinTech adoption, while 22 per cent said that the need for clear regulatory and legal frameworks was a key driver for enabling FinTech innovation for their organisation.

More than a quarter (28 per cent) ranked private equity and venture capital - and banks and asset managers - as the top drivers of capital investment into FinTech over the next three years, with the report stating that capital from institutional funds and big banks is critical to enabling startup innovation.

While 39 per cent of respondents indicated that adoption of FinTech is a high priority for their companies, 29 per cent are reinvesting only 10 per cent or less of their profits into FinTech development, pointing to a gap between awareness and actual resources.

Scott Joachim, who co-chairs Goodwin’s FinTech practice, said: “As digital transformation of financial markets accelerates at breakneck speeds, fintech presents - in equal measure - significant opportunities and challenges for both investors and innovators around the world."

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