London has been at the very heart of the global ‘fintech revolution’ for several years. Join leading industry players at London’s biggest fintech event – London Fintech Week – with a series of conferences, workshops, hackatons and meetups – and get the answers you need directly from the decision-makers.
London is frequently referred to as the fintech capital of the world, and companies in Shoreditch’s ‘Silicon Roundabout’ and Level 39 in Canary Wharf are fast becoming the place to work for financial technologists. Deal volumes in London have been growing at 74 per cent a year since 2008, compared with 27 per cent globally and 13 per cent in Silicon Valley. During the same period, the value of fintech investment in the UK increased nearly eightfold, nearly twice the global average –and more than twice that of Silicon Valley.
As the date for the Government triggering Article 50 (Brexit) looms closer, some see challenges ahead. But the unique London fintech ecosystem will also in the future present plenty of opportunities for Norwegian innovators. Here are the reasons why.
Customers at your doorstep
Several of the world’s largest banks, including HSBC, Barclays, Lloyds and Standard Chartered, are headquartered in London – and all experimenting with fintech in one way or another. HSBC set aside £160 million for investment in fintech in 2014, and in October moved its 3,000 staff innovation team to the Blu Fin building in Southwark. Other players, such as Lloyds Bank are also investing heavily in digital transformation – no less than £1 billion in digital banking capability over the next three years. All of these players have accepted that they will need to work with fintechs to survive. Potential partners are not limited to the larger banking players: The money transfer company TransferWise recently launched a new service that allows users to send money internationally through Facebook’s chat application. Facebook plan to move into a new headquarters in London later this year.
World-class accelerators and incubators
Secondly, London offers a wide range of world-class accelerator programmes. One of the first dedicated accelerators for fintech startups in the UK, Barclays Accelerator, lets companies use exclusive Barclays data and technology. Another leading accelerator, Startupbootcamp Fintech, have partnered up with MasterCard and Lloyds Bank to provide exposure, APIs and a network of professionals for early stage fintechs. There are also workspaces dedicated to fintechs, including Level 39 in Canary Wharf – currently home to Norwegian Huddlestock, Encap and Signicat. Startups from these programmes are significantly more likely to secure investment and gain a competitive edge through the support and mentorship they receive.
Availability of business capital
More than half of all fintech investment in Europe is channelled into London. The sector is well served by angel investors, many of whom have worked in financial services and have the required skills and experience to understand fintech, and are excited by the market opportunities. Major new tech funds setting up in London from around the world include Santander (£60m), Index Ventures (£328), Google Ventures (£76m).
A supportive regulatory environment
As early as in the 1990s, the UK launched a series of tax relief programs to encourage investments in smaller high-risk trading companies, and subsequently, some of the first fintech companies were started in the UK.
In 2014 the UK’s financial services regulator, the Financial Conduct Authority, established interim licenses for P2P lenders. In 2016 the Government further expanded the potential market for investments through P2P lenders by allowing – in theory – the platforms to offer the Innovative Finance Individual Savings Account (IFISA). The FCA also established the first regulatory ‘sandbox’ in the world, where firms can test innovative products without all of the normal regulatory requirements for engaging in financial services.
Join potential partners at Fintech Week?
The regulatory environment has allowed many fintech companies to grow in London, and the unique ecosystem in UK’s capital will help companies flourish also in the future. London has the capital, customer base, infrastructure and talent you need to succeed. In July, London’s biggest fintech event – London Fintech Week – is back for a fourth year. Join potential partners and customers in a series of conferences, workshops, hackatons and meetups – and get the answers you need directly from the decision-makers.
Johannes Hvidsten, Senior Adviser, Innovation Norway