• Zak Westphal, CEO and Co-Founder at StocksToTrade


• 10.01.2025 04:40 pm

The financial technology (fintech) revolution is transforming the finance sector, opening up significant opportunities and challenges for entrepreneurs. As a global fintech leader, the UK has a front-row view of these rapid changes.

To help UK founders take advantage of this disruption, we spoke with Zak Westphal, CEO and Co-Founder of StocksToTrade, a leading US fintech firm empowering retail investors. From his experience across the US and global fintech space, Zak shares his thoughts on key trends reshaping the industry and advice for UK entrepreneurs looking to build fintech companies.

In our conversation, Zak Westphal highlights some of the main trends to watch out for and explains why traditional businesses must pay attention to this exciting new space. While fintech evolves quickly, Zak sees tremendous possibilities for ambitious founders to create transformative businesses.

What are the biggest fintech trends that UK entrepreneurs should be paying attention to right now?

The UK fintech scene is buzzing, with tons of innovative companies popping up. As an entrepreneur, you must keep tabs on the industry's key trends.

Open banking is likely the biggest game changer at the moment. With the UK's forward-thinking regulations, companies like Revolut and Monzo have leveraged open APIs to build creative apps for money management, instant notifications, and more intuitive banking. Others like Starling Bank use this data access to provide seamless financial services. The possibilities here are massive.

Embedded finance, integrating fintech services into non-financial businesses, is another big trend. For example, you can now easily get insurance or lending products while online shopping—that convenience is a game-changer. 

You also can't ignore how AI and machine learning transform financial services. Leveraging these technologies for personalized advice, real-time insights, and fraud prevention presents a significant competitive edge. The key is to use them to truly enhance customers' experiences.

While still early-stage, the decentralized world of DeFi and crypto holds loads of potential, especially as blockchain achieves more mainstream traction. Though regulations remain murky, ambitious entrepreneurs who can make DeFi accessible and secure have tremendous opportunities, given the UK's vibrant crypto ecosystem.

How can UK startups leverage fintech to gain a competitive advantage?

UK startups have a prime opportunity to utilize fintech to get ahead of the competition. First, lean hard into automation for accounting, payroll, and customer service operations wherever possible. There are a ton of great platforms that can seriously boost efficiency.

You must also harness data analytics to gain valuable intel on your customers' behaviors, preferences, and pain points. These insights are invaluable in tailoring your offerings.

Additionally, with the UK demanding more financial innovation—around lending, investing, and payments—don't be afraid to create new solutions tailored to underserved niches you spot. If you build something that meets people's needs, you'll be onto something worthwhile. 

Lastly, partnerships with incumbent institutions can provide tremendous resources and credibility. The UK is known for collaborative ecosystems uniting agile startups with big banks and corporates. Aligning with the right established players can bring regulatory expertise, ready-made customers, and other key advantages to scale growth.

What are the unique challenges and opportunities for fintech companies in the UK market compared to the US?

The UK and US have thriving fintech scenes, but some key differences exist.

The UK is more concentrated - a few big banks dominate, which is tough for startups but presents opportunities to disrupt. The FCA actively nurtures innovation through open banking and other forward-thinking policies. This regulatory support helped the UK take a leading role globally.

Both places have no talent shortage, but the UK boasts an unmatched depth of financial experience. Yet top-tier tech talent is in high demand everywhere nowadays.

As for funding, the American VC scene is more mature, but UK fintech investment is exploding at lightning speed. For UK startups with clever ideas, enough backing exists to take on the world. Each market has its unique mix of hurdles and opportunities. But overall, the future looks bright on both sides of the pond.

What advice would you give UK entrepreneurs looking to raise capital in the current fintech landscape?

Fundraising's always a grind, but UK fintechs can get backed with the right strategy.

Most importantly, you need an airtight value proposition—why should investors care? What pressing problem do you uniquely solve? Clarity is everything.

Build a great team—the magic formula of industry veterans and technical unicorns. Investors ultimately bet on people. Show tangible traction—users, revenue, partnerships—evidence you're gaining momentum.

Know all your funding options - angels, government schemes, etc. Venture capital is not the only route. And network, network, network - events, peer entrepreneurs, the whole deal. Fintech's a tight community, so leverage those connections.

How can traditional businesses in the UK adapt and integrate fintech solutions to stay relevant?

Adapting and embracing fintech is no longer optional for many traditional UK businesses - it's imperative for survival.

The key is viewing fintech not as threats but as powerful potential partners. Their agility and innovations can strengthen establishments struggling with legacy systems. It’s about how we can evolve by combining our scale and expertise with their cutting-edge capabilities.

Every business now relies on digital payments, lending, and data analytics. Rather than building in-house, partner with a fintech company specializing in those solutions and bake their tools into your customer experience. Made simple through APIs, this embedded finance approach tightens engagement and visibility across the entire consumer journey.

Take analytics. Leveraging AI and big data unearths game-changing business insights from customer behaviors. Applying automation then streamlines operations exponentially while enabling hyper-personalization.

No area of a business remains untouched by fintech’s potential. However, it requires a collaborative, ecosystem mindset focused on using technology to truly empower customers with better experiences and outcomes.