London is often considered to be the world’s ‘fintech hotspot’, with more than three quarters of London’s financial tech community claiming the city is a better incubator than other global tech hubs, such as Silicon Valley. Every day new companies make a debut on London’s fintech scene and almost half of the FinTech50 come from the capital. But as the CEO of a company operating in London’s fintech sector, I often find myself wondering what it actually means to be a fintech startup.

There’s no doubt the term ‘fintech’ is a modern invention. Traditionally, the word was used to describe any technology applied to financial services activities. The very first fintechs concentrated on back and middle office functions, without much focus on the customer-facing front office. Those fintechs were often seen as ‘facilitators’ – mostly small companies that helped established financial organisations function more efficiently, by automating the back-office processes through software, while at the same time, reducing costs. 

And while this definition remains valid for some fintech companies today, most young fintechs are much more than just facilitators – they are in fact disruptors, bringing in new approaches to how people think about finance and introducing technology that threatens to shake the old world order and puts the end user at the heart of what they do. Today’s fintechs very much transcend the boundaries of traditional industries – they are not truly financial services organisations, but neither are they just technology companies. Today’s fintechs are innovators – working across a range of traditional processes of finance to solve a real pain point. 

Innovation plays a key role for the fintech community, which can be illustrated by the fact that it’s becoming increasingly difficult to divorce the term ‘fintech’ from the term ‘startup’. The meaning of the word ‘startup’ is also undergoing a major change – a few years back a ‘startup’ meant two, cash-poor geeks, working on a complicated piece of software, with a dream that it will change the world. Now the term ‘start-up’ is being used to describe a much wider community of companies – not merely those that started off as a project in someone’s garage but companies that challenge the way business is done in their respective industries. 

And as fintech startups now also hire a variety of talent – not just techies or business heads but creative directors, people with marketing and communication background and arts graduates, the fintech community is fast becoming a diverse environment where creativity and innovation thrive.

While traditionally, the fintech startup scene was dominated by B2B companies who worked closely with financial institutions, a sharp rise of B2C fintechs in recent years has given the more traditional companies the opportunity to truly step up to the challenge. As B2C fintechs bring products and solutions directly to the customer, often cutting out the institutions they develop solutions for, the role of B2B fintechs will grow in importance in the coming years. Not only will they be able to assure that banks and financial institutions don’t get lost in the process and become merely a ‘facilitator’ in the grand scheme of things but they will play a crucial role in consolidating the industry and bridging the gap between the old and new players. 

We can expect ‘fintech’ and ‘startup’ definitions to be fluid over the coming years, but to me, change will remain at the heart of what it means to truly be a fintech. With financial technology at the core, the term ‘fintech’ defines the disruptors, the challengers, and the pioneers of financial services technology. And I’m proud to be leading a company that’s part of that movement.