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European fintechs expect to grow business in next year

European fintechs expect to grow business in next year

Optimism is returning to Europe's fintech sector, suggests new research from MHP Group which shows that more than three quarters of firms expect their business to grow in the next 12 months.

After a tricky couple of years for the sector, MHP interviewed more than 50 fintech leaders from the UK, France, Germany, Italy and Spain about their expectations for the future.

Confidence is returning to the European fintech sector as a whole. UK leaders are the most optimistic, with 83% expecting growth in the next year, followed by France (80%), Germany (77%), Spain (72%) and Italy (66%).

More established fintechs, those over 10 years old, are the most likely to expect growth (79%). Earlier stage businesses are slightly less confident, with 55% of those younger than five years predicting “significant” growth in the next 12 months.

A return in confidence to the sector came hand in hand with a renewed focus on achieving profitability, a top priority for over two thirds of those quizzed.

Attracting customers, investors and talent are recognised as the top three factors in getting profitable growth, with relative consistency across markets, maturity of business and size.

Customer acquisition and retention is regarded as the top ranked priority for 55% of fintech businesses, rising to 71% for Italian firms. Larger and more mature players place a bigger emphasis on this than smaller, newer outfits.

Securing funding from investors also ranks highly, with 45% of European fintech leaders prioritising capital injections to fuel their growth.

In the war for talent, European fintechs are not just competing against each other, but the wider tech ecosystem, as well as those from America, Asia and the Middle East where salaries and perks can be more attractive. As a result, two fifths of respondents will prioritise finding the right talent in the next 12 months.

Nick Woods, head, financial services, MHP Group, says: “The sense of optimism returning to Europe’s fintech sector represents more than just a shift in sentiment. After a challenging period, battle-hardened leaders are drawing on their hard-won wisdom to guide their growth strategies.

“The heady days of cheap money and a scale at all costs mindset have been replaced with a sharper focus on profitable growth, signalling the dawn of a more mature approach."

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