London: the FINTECH capital of the world

Written by Graham Dockrill

Financial technology, known as ‘fintech’ is a portmanteau of financial technology that categorises the emerging financial services sector. Fintech is one of the fastest-growing areas for venture capitalists. It includes computer programs and other technology used to support or enable banking and financial services.

For the past decade, the UK has been leading the world in fintech.  A strong ecosystem exists for start-ups to prosper under an umbrella of government initiatives and corporate incubators and accelerators.

 

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Data from 2015/16 shows that the UK fintech sector generated £6.6bn in revenues and attracted roughly £524m in investment. It employed over 61,000 staff (about 5% of the total financial services workforce and second only to California with 74,000).  In mid-2015, then prime minister David Cameron was promoting the UK as the Fintech capital of the world. Read the article here. The UK Treasury is encouraging (and enforcing) banks to open up customer data access to other businesses to encourage innovation and boost competition in the sector.


The UK is the fastest growing region in global fintech, with a 78% rise in deal volume since 2008. Santander recently announced a $100M fintech fund that will be located in London.  Outside of London, cities including Belfast, Manchester and Leeds have growing fintech sectors.

The opportunity for New Zealand fintech companies to take advantage of the changes embracing the sector is real.  One company to embrace this is Treasury cloud solution provider HedgebookPro.  HedgebookPro is an online treasury management software solution that simplifies the compliance burden of financial reporting. Similar legal and financial frameworks in New Zealand and the United Kingdom mean New Zealand companies can reduce the complexity of market entry, simplifying the customer acquisition process and generating export revenue.

 

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A good starting point for any fintech company wishing to grow in the UK is Fintech Circle and Fintech Tours.  A two day ‘tour’ workshop is available for as little as £300.00., Through meeting other fintech companies, investors, and entrepreneurs you will better understand the fintech sector.  These organisations also have an intimate knowledge of London’s fintech ecosystem and can refer you to their contacts within their network during and after the event.

“The two day workshop was extremely well organised and gave a 360° overview of the opportunities London offers to a Fintech. Susanne is a great coach also, putting you at ease when sharpening your pitch after an 18 hour day and international travel. I highly recommend Fintech Tours for any entrepreneur considering the London market.” – Nader Erfani, CEO Quantesys


The banking sector in the UK works closely with fintech start-ups and often invests in or acquires companies where a natural fit exists.  In addition to this, accelerators and incubators are many with a specific focus on fintech.


Rise
 is an open innovation programme offered by Barclays Bank. They have offices around the world and being a member of one allows you to hot desk at any other.  Currently they have incubators in:

  • New York
  • London
  • Manchester
  • Vilnius (Lithuania)
  • Cape Town
  • Tel Aviv
  • Mumbai

Rise also offer intensive accelerator programmes via their partner TechStars.  The London office is in Shoreditch and is recognised as the ‘Silicon Roundabout’ of the city.


Level 39
 is in Canary Wharf (the epicentre of London’s financial institutions) and claims to be Europe’s largest technology accelerator for finance, retail, cyber- security and future cities technology companies.


Both co-locate environments foster innovation, collaboration and high growth.  With direct access to strategic partners including all the major banks and people of influence, it’s important to choose where you wish to be located.