As London FinTech Week draws to a close, one thing seems to be clear – London and the UK are set to lead the global FinTech race. In fact, $5.4bn has been invested in UK businesses such as TransferWise and Funding Circle, more than the total amount invested across the whole of Europe.
During a speech earlier on in the week, Innovate Finance’s CEO, Lawrence Wintermeyer outlined why exactly “London has the blueprint for the best FinTech ecosystem in the world.”
London has the world’s largest financial services sector, supported by a neighbouring booming tech sector. The combination of these two neighbouring thriving sectors is something which distinguishes London from the likes of Silicon Valley or Wall Street.
We have a unique environment for investment as a result of tax break incentives such as the SEIS, that allow investors to invest £100,000 in a startup with a 50% tax break. In fact, UKTI’s recent report revealed that foreign direct investment went up 50% in the UK last year, making the UK the third in the world for investment.
London has an enviable and diverse talent pool, with more workers in FinTech than either New York City or Silicon Valley.
We have a diverse ecosystem, with hipsters, tech startups, capitalists and large financial institutions broadly participating and collaborating in the same space. This is backed by emerging financial hubs across the country, which Innovate Finance is aiming to connect to ensure that we are supporting FinTech innovations on a regional scale.
Government support for the sector has been critical. As mentioned previously, the government has proactively tried to attract foreign investment, whilst practically focusing the regulators on removing barriers to ensure that there is a level playing field for new FinTech entrants and large legacy players. Moreover, it has actively supported initiatives such as the FCA’s Project Innovate, which helps startups navigate the UK’s regulatory landscape.
Combined, these factors have accelerated London’s position in the FinTech space, with 63% of entrepreneurs viewing it as the world’s leading FinTech city. Collaboration between the finance, technology and government sectors as well as between the FinTech startups and large financial institutions, in particular, has played a significant role in making this happen. This collaboration is London’s FinTech blueprint – it is unique to the UK and has yet to be replicated in other FinTech hubs.
As London’s FinTech scene continues to grow, we hope that its unique ecosystem will be used as a model for other emerging tech sectors as well as thriving global FinTech hubs across the world. Got any thoughts on why London has the blueprint for the best FinTech ecosystem in the world? Please comment or tweet @InnFin.