With Revolut, the digital banking scale-up, becoming the UK’s most valuable private tech company (valued at $33bn) and money transfer challenger Wise valued at almost £9bn in a landmark direct listing, all eyes are on London as it strives to maintain its position as a major global hub for digital financial services post-Brexit.

This doesn’t seem in doubt at present. British fintech firms continue to attract huge amounts of international investment and London remains a key destination for fintech fundraisings, with the city ranked second in the world behind San Francisco and slightly ahead of New York. Indeed, fintechs  secured $5.7bn worth of venture capital investments in the first half of 2021 alone, easily outstripping the $4.3bn secured across the whole of 2020.

But with some fintechs now valued higher than traditional banks – a headline the media in particular has seized upon – some commentators have started to question whether such eye-watering valuations are warranted, particularly given that many high-growth disrupters are still failing to break even.

With rock bottom interest rates and Quantitative Easing continuing to inflate asset prices, investors seem willing to pay a premium for growth, but with many business models remaining untested over the long-term and economic conditions anything but certain, critics argue we could be in a fintech bubble.

If Revolut’s recent funding round is a barometer of wider investor sentiment, it seems unlikely that such fears will deter future interest in the sector at least in the short to mid-term.

A fundamental shift to fintech?

The valuations of fintechs do not simply reflect the wider funding environment – they reflect the companies themselves, the real world problems they solve – and the growth potential for the sector as consumer behaviour changes.

The COVID-19 pandemic has undeniably been a key factor in the fintech boom in the last 18 months, turbocharging digital adoption by consumers and businesses whilst also impacting their financial needs. Simultaneously, innovation in service industries has reset expectations with customers expecting a user experience from their financial provider equivalent to that seen across other areas of their lives.

The communications challenge: delivering on potential

How then can high-growth disruptors seize this unprecedented opportunity to transform the sector and deliver on their valuation potential?

From a communications perspective, it presents an interesting challenge. In the quest for market share, businesses must simultaneously create brand buzz whilst differentiating themselves from both traditional players and an ever expanding peer group of new entrants.

But rapid growth through disrupting the status quo inevitably draws scrutiny from regulators, politicians and commentators. Against this backdrop, businesses must be able to tell a coherent story to multiple stakeholders, positioning themselves as a responsible innovator committed to solving a new set of challenges for their clients. Fintechs can earn trust with these audiences by explaining their value proposition through the lens of both the customer and wider society, and by explaining the vision and values that drive them.

Combining a compelling brand, with a grown-up approach to stakeholder management and an investment case that captures the imagination of investors is no mean feat, particularly at a time when many businesses are building their in-house capabilities and looking to disrupt the market as quickly and as powerfully as possible.

For the many business that have recently secured investment, effective reputation management is a cornerstone of building and protecting their valuation at a time when the pressure to deliver on their much vaunted potential is greater than ever.