Whether it’s pensions, mortgages, or taxes, a new wave of disruptors is rapidly changing the way we think about our finances this year.
Finance has always been a bit complicated. Whether applying for a mortgage or filling out your tax return, there’s endless forms and confusing jargon to contend with.
Now, a number of companies have emerged to challenge the ‘old ways’. They’re making people’s lives easier with clever, tech-based solutions, whether by offering quick and straightforward mortgage applications or taking the pain out of tax time.
In today’s dour economic outlook, this is a particularly apt mission. The cost of living crisis has sent business costs skyrocketing, making it an imperative for SMEs to find the cheapest and most-efficient way to manage their finances.
Fintechs will play an important role in the UK’s recession support and recovery, helping people, organisations, and even the government to get back on their feet.
Is there room for more among this throng? Absolutely – especially if you’re launching a finance startup to simplify and streamline complex money topics. In the below guide, we’ll take a closer look at the opportunities in the sector for 2023.
Looking to launch your own business but not sure where to start? Our guide on the cheapest business ideas is sure to get your creative juices flowing.
Financial education – new ways to learn about what you can do with your money
First up, the bad news: the 2021 UK Financial Wellbeing Survey found that 50% of working-age adults don’t feel they understand enough about pensions to make decisions about saving for retirement.
The good news? This presents a terrific opportunity for new startups who are laser-focused on simplifying complex personal financial matters for their customers.
There are already some intriguing startups addressing the issue by targeting specific groups. For example, Mintago, which aims to make the process of managing finances and pensions easier for all users, regardless of their financial situation.
Rachele Carraro is Marketing Manager at Mintago. Carraro predicts that 2023 will bring a surge in demand for “comprehensive and personalised” finance solutions like Mintago, due to financial stress caused by the cost of living crisis.
Against a backdrop of increasing costs, record levels of inflation, and an unstable global stock market, Mintago gives users access to a pension dashboard, financial wellbeing app and educational programme. And, as real wages fall, Mintago has also rolled the service out to business users to help workers battle the cost of living crisis.
“More [companies] are becoming aware of the importance of financial wellbeing as a benefit for workers,” adds Carraro. “We also help employers to implement the government’s salary sacrifice pension scheme, saving both them and their employees money in National Insurance payments.”
Others, like Yonder, are taking a different tack. The London-based startup wants to make credit more accessible. Disrupting what its founders describe as the “archaic” method of credit checks in the UK, it uses a modern Open Banking system to review eligibility.
Trust is fundamental to credit markets. Recognising that consumer confidence in credit is low – particularly amongst younger audiences – Yonder also offers rewards to incentivise its audience. Partners include trendy brands like Secret Cinema, BAO, and even fellow Startups 100 Index 2023 winner, HumanForest.
Financial education business ideas
Financial education mobile app
The key to coaching users on their financial behaviour is being able to approach what can often be a pretty dry subject in a way that brings it to life and really illustrates the impact that different financial decisions can have. Interactive or gamified elements can do a lot of the heavy-lifting here.
Specialist money tracking app
In an unstable economy, people are more likely to turn to unregulated lending sources, like Buy Now, Pay Later (BNPL). Building an app that tracks niche loans could be a useful way to help people stay on top of their finances and make sure they can afford to pay off the debt.
Finance infrastructure – new ways to support SMEs
When was the last time you went longer than a week without shopping online?
Ecommerce companies have uplifted the traditional sales desk and placed it firmly online. It’s projected that online selling will make up 22% of global retail revenue this year – and not just for products-based businesses.
Every business owner – from restaurateur to window cleaner – can use websites to promote their services and attract customers with a promise and brand identity – then accept payments using financial infrastructure like mobile POS or payment gateways.
As a result, clever companies are cropping up with new fintech tools designed to streamline the payment process for customers, like Startups-100 listed, Toqio.
The specialist fintech-as-a-service platform provides the plumbing for startups to launch their own fully branded banking or finance solutions as an app or on the web. As a result, Toqio users can capitalise on the ecommerce trend without having to fork out thousands on development costs.
Then there’s Pollinate. Coming 45th in this year’s Startups 100, its customer base is not SMEs, but the banks that cater for them. The white-label solution lets banks distribute a unique arsenal of tools amongst their existing small business userbase, and has already raised a whopping £70m from investors.
Finance infrastructure business ideas
Fintech cybersecurity consultant
With the emergence of more financial applications for software comes more opportunities for fraudulent behaviour and scams to go undetected by an unassuming small business owner.
Cybersecurity consultancy will no doubt see a big uplift as a result of the trend. As more and more payments take place in real-time, with fewer background checks, we need real-time fraud detection techniques to help firms ensure their financial infrastructure is able to prevent attacks – not just react to them.
Tax – easing the most stressful time of the business year
As a small business owner, tax time is never going to be fun. You fill in complex forms, and at the end, a load of money leaves your pocket.
Over the years, the self-assessment process has become easier. For most people, filing online is far quicker than filling out a paper tax return, and cloud-based accounting software can really help people keep track of all their transactions without having to sort through an annoying paper trail.
What a lot of people really want, though, is something that just takes all the hassle away and does (almost) everything for them. This is a strong business opportunity for startups looking to make the tax return process accessible and clear.
Take TaxScouts, the ultimate example of “taxes made easy”. The service lets users pay a fixed fee of £119 to be matched with an expert accountant, answer a few questions, and have their taxes filed.
Even more helpfully, there’s the firms that are helping SME users to access cost-saving measures, like R&D tax credits. These are incentives provided by the government for small businesses to invest in growth and innovation.
R&D tax credits are ideal in today’s economy, as SMEs struggle to fund growth plans while prioritising survival. But a confusing, time-consuming application process has historically made them under-utilised by qualifying firms.
WhisperClaims has designed a clever bit of kit that is now used by accountancy firms across the UK. It may sound niche, but at the touch of a button, it allows accountants to prepare comprehensive, detailed reports suitable for submission to HMRC.
Gillian Carmichael, Head of Marketing at Whisper Claims, says the company was launched in light of “the high number of claimants that were being turned away because their claims were too small to be processed economically by consultants with their contingent fee pricing models.
“Our founders felt that automating the process of preparing R&D tax claims would be hugely beneficial to the financial industry.”
Tax business ideas
Automated accounting software
In a post-Brexit world, startups have tonnes of new tax challenges to contend with – particularly when it comes to importing and exporting. HMRC has set out new guidance on complicated processes like paying duties and VAT on customs.
Carmichael warns that building any financial software requires consideration of the industry’s rigid regulation to build user confidence. “It’s imperative that customers trust that comprehensive systems and processes stay current on legislation, and provide a safety net for maintaining rigorous accounting standards,” she advises.
Marketing and branding consultant for accountants
To thrive in this new landscape where the key is to be clear, transparent and user-friendly, accountants will need to move with the times and approach their business in a customer-first way.
Countless business owners will tell you that getting a good accountant makes things a million times easier. Despite this, accountants have a bit of an image problem, generally being perceived as dull people you wouldn’t want to spend five minutes with.
To help them combat this, you could specialise in accountant branding or website design, to ensure that their public faces chime with this new era of finance made easy.
Mortgage services – making home buying easier
There have been predictions aplenty of a housing market crash in 2020, 2021, and 2022. But analysts have been consistently surprised by UK house prices continuing to rise, fuelled by a property supply shortage and a dwindling rental market.
2023 is once again predicted to bring the long-expected property crash – only this time, it’s looking considerably more likely.
Skyrocketing interest rates mean lenders are more cautious about approving mortgage applications, making an already stressful process that much more demanding.
People will always need homes, and demand won’t disappear altogether. But, in a poor economy, would-be homeowners need more guidance about what they can and can’t afford. As a result, this complex and emotionally-gruelling process is ripe for disruption by new business starters.
Digital mortgage broker and lender Nude, for example, aims to help first-time buyers who are saving for a mortgage and might struggle to access a financial advisor.
Then there’s Genie AI, a Startups-100 company for 2023 that’s using AI to make legal templates more accessible and legible for the everyman.
Each clause is easy to understand, explaining the underlying issue and providing alternative solutions or guidance on how to proceed – something that could prove endlessly valuable to first-time buyers struggling to understand the complex mortgage lender system.
Mortgage services business ideas
Viewing apps
Harder-to-access mortgages + a nationwide property shortage = more rental competition. The Propertymarket annual report shows that demand for rental property has grown by 57% between 2018 and 2022.
As more people search for short-term properties, the need for an organisational app that can help potential renters – or buyers – stay on top of viewings is a real one. Could you build the next Excel app for the housing market?
Final thoughts
If you’ve got some know-how in this area, there’s never been a better time to start a new finance business. Just make sure that your ideas are fully compliant, as this can trip up startups entering the heavily-regulated financial sector.
Whether you want to help improve the country’s money literacy, assist people in navigating the world of mortgages, or aid accountants embracing new attitudes – these trailblazing startups have proven there’s a huge appetite for finance startups making things more straightforward in 2023.
