The UK’s fintech future is bright

‘There is every reason to expect the UK will remain the world’s leading fintech startup hub’


Over the last few years, we have been warned of the possible negative effects of Brexit on the UK fintech and payments landscape, with the potential for loss of access to the European Union through the bloc’s passporting arrangements, as well as loss of talent.

A recent study by the Digital Finance Forum revealed that although 63 per cent of fintech company founders say the UK is the global leader in the sector, only 33 per cent are optimistic that this will still be the case in five years.

UK’s position as major fintech hub is safe

However, despite these concerns, the UK payments and fintech sectors are still going strong. Investment in UK fintech rose by 120 per cent to $3.5 billion from 2017 to 2018, according to Innovate Finance.

And this is showing no sign of slowing down. In fact, there is every reason to expect the UK will remain the world’s leading fintech startup hub for many years to come. Investment figures for the first six months of 2019 were certainly representative of this, reaching a record level for a half-year of $2.9 billion and on track to exceed the 2018 total.

The UK has become a true hub for technology-driven innovation in finance in recent years. The combination of forward-thinking regulators, tech talent and a well-developed network of support for tech startups have all helped lay the foundations for this success.

The UK’s Financial Conduct Authority (FCA), for example, is helping the most forward-thinking startups test their products, services and business models in a live market environment through their regulatory sandbox. This means startups and innovative companies have the support and freedom they need to develop the next generation of business-to-consumer and business-to-business solutions, from regtech to new ways to pay and new financial services tools, without worrying about falling foul of penalties.

This approach has been so successful that now other regulators are following suit. Singapore has begun a similar initiative, as have authorities in Phoenix, Arizona, who are working with the FCA to develop a sandbox of their own.

Initiatives to support fintech growth

In addition, the UK Competition and Markets Authority is driving innovation and competition through its own open banking initiatives. By harnessing the power of open banking, it is pioneering the creation of opportunities for new third-party providers to create services that go even further towards meeting customers’ evolving needs.

And the work doesn’t stop there. Plenty is being done by the government to nurture these seeds to create future sector growth.

The UK’s Department for International Trade (DIT) is working to promote UK fintech by establishing its Five Fintech Bridges, which are agreements with other fintech hubs across the globe, from Singapore and South Korea, to China, Hong Kong and Australia. These deals will go a long way towards helping UK payments and fintech firms overcome barriers to these international markets through collaboration with local regulators, sowing the seeds for impressive international expansion.

The DIT is also supporting growth closer to home by partnering with us for this year’s PayExpo, providing startups with access to the broader payments and fintech community. We are working with the DIT to invite early-stage payments and fintech startups to attend, speak and showcase their solutions for free to a wide international audience of their peers, as well as prospective investors, partners and customers.

Whatever happens in the coming months regarding the UK’s future relationship with the EU, entrepreneurs in the fintech and paytech sector can rest assured that the support and infrastructure is there to help their budding startup businesses to grow and thrive into the future.

By taking advantage of platforms such as PayExpo, startups can be confident they have the guidance and tools they need to navigate political uncertainty and access investment and customers, so they can carve their own niche in the global payments and fintech market.

Learn more and register to attend at www.payexpo.com