By Nick Giles Co-founder of Seven Hills No-one could deny that fintech (financial technology) is an industry with real momentum. Last year, more than $530m was invested into UK fintech companies, which are changing the way we pay bills, exchange money, make investments and much more besides... That represented a more than threefold increase on the 2013 level. Building on London’s emerging status as a technology incubator, and its established reputation as a global financial services capital, entrepreneurs have been building companies that cater to the growing consumer demand for financial products and platforms that offer speed, value and convenience. 2014 felt like a breakthrough year, in which fintech became a recognisable asset class and London its natural home. Now the question must be how we can turn this emerging industry into a genuine world-beater for the UK economy. That was the reason my company - Seven Hills - convened a new event this week, in partnership with Tech London Advocates and Level39, to specifically examine the opportunities and challenges for UK fintech companies, and in particular how London can build sustained momentum as a global capital for the sector. Our speakers, ranging from fintech founders such as MarketInvoice’s Anil Stocker and RateSetter’s Rhydian Lewis, to investors including Passion Capital partner Eileen Burbidge and Betfair co-founder Ed Wray, were unanimously optimistic about the growth potential of the sector in London. It’s pretty clear that London and the UK is powering ahead in fintech in Europe, was the view of Tech City UK CEO, Gerard Grech. 69 per cent of investment in fintech in 2013 was in the UK, he told the audience gathered at Level39 yesterday. The benign regulatory environment for fintech in the UK was highlighted as a significant point of competitive advantage for London, with Rhydian Lewis arguing that government had stolen a march on the City in its appreciation of the growth opportunity around fintech. The double-edged sword at the centre of the debate is the talent pool. While most speakers were in agreement that London has become a magnet for entrepreneurs and technology professionals from around the world, others made the point that the rapid growth of some fintech start-ups is outpacing the supply of the designers and developers they need to scale. “There’s so much competition on a worldwide basis that it’s hard [for companies] to find the people to grow as fast as they want,” said Greg Rogers, managing director of the Barclays accelerator powered by Techstars. This is a technology sector in which the UK can genuinely consolidate a position as a world leader While many fintech companies are still looking at how they grow within the UK market, others are starting to explore the international opportunity. MarketInvoice’s Anil Stocker talked about the likelihood of more fintech start-ups venturing overseas in the next 18 months and highlighted the need for careful attention to detail in navigating the maze of legal and regulatory systems that have given high-profile problems, outside the financial industry, to the likes of Uber and Airbnb. Image from gettyimages Yet while there are clearly challenges ahead for fintech companies, the prevailing sense is one of great optimism and ambition: that this is a technology sector in which the UK can genuinely consolidate a position as a world leader. The founders who spoke at our event demonstrate the breadth of business opportunities that exist under the fintech umbrella: from digital current account provider Ffrees to international transfer app Moni; equity crowdfunding platform Venture Founders; foreign exchange provider Caxton FX; direct debit business GoCardless; and young people’s finance app Osper. Undoubtedly, entrepreneurs are making the most of the opportunity to bring the cost and convenience benefits of digital platforms to the finance industry. As one speaker put it, Finance is 90% IT anyway, if there’s one industry well suited to [a] tech revolution, it’s finance. In London, that revolution has well and truly begun. Now the opportunity is for the capital’s fintech companies to scale up and take on the world.
Posted on: Sun, 25 Jan 2015 06:19:18 +0000
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