United Kingdom FinTech Market Opportunities
The Financial Technology (FinTech) sector is revolutionizing the financial services industry by simplifying transactions, reducing costs related to human capital, empowering innovation, and enhancing security. The size of the global fintech market was estimated at $110.59 billion in 2020 and is expected to reach $669.50 billion by 2023. The global Fintech market is anticipated to be driven by customers’ growing need for mobile banking platforms that offer a more user-friendly environment for conducting financial transactions. In the UK, the FinTech sector is comprised of over 1,600 firms. Projections indicate that the FinTech sector will double the amount of Fintech firms in the UK by 2030. The UK FinTech sector benefits from a supportive regulatory system. The Financial Conduct Authority and the Prudential Regulatory Authority work to build a competitive and innovation-friendly business environment allowing the fintech sector to grow at a sustainable and convenient growth rate.
According to the London Stock Exchange, London is the third biggest fintech hub in the world. $3.6 trillion of daily foreign exchange trades are transacted in London. An evident driver of a large number of daily transactions has traditionally been the UK’s location, which benefits from a time zone that crosses almost all major markets.
Fintech in the UK is not limited to London
The 2021 Global Fintech Rankings, compiled by Mambu, has named Manchester as one of the top 50 cities in the world for starting and scaling up a FinTech company. It is categorized as the 2nd FinTech hub in the UK in the Global Fintech Rankings and the 9th in Europe. Manchester has a cluster of 39 Fintech Startups and scaleups. An ever-growing number of coworking spaces are facilitating connection and collaboration between startups, scaleups, and other organizations. The constant growth of E-commerce in Manchester has driven the growth of FinTech companies, and the UK continues to see global companies set up offices in the region.
In addition to Manchester, the UK lists Edinburgh, Glasgow, Leeds, and Birmingham as established FinTech clusters/hubs. Emerging clusters include Northern Ireland (Belfast), Wales (Cardiff), Bristol, Reading, Cambridge & Newcastle.
High levels of investment in the industry are undoubtedly a driving force behind the strong fintech ecosystem. UK investment in 2021 reached $11.6 billion (figure includes venture capital investment and listings on the London Stock Exchange), according to Innovate Finance.
Investment in the fintech industry outside of London is growing faster than within the city. Global fintech investment grew 183% in 2021 (from 2020), while investment growth in the UK was 217%.
For information or updates on the fintech sector, please contact Stephen Brown, Commercial Specialist.