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The current state of the Fintech sector


Claire Cockerton

CEO, ENTIQ and Founding CEO and Ambassador, Innovate Finance

As the UK’s independent voice of the fintech sector, Innovate Finance is bearing witness to the transformative innovations that are reforming the financial services sector.

Innovate Finance visited the US with the Mayor of London last month to foster greater trade and investment connections between New York and London – the world’s biggest and most important financial epicentres. Innovate Finance helped to select a delegation of leading fintech firms, which were ideally placed to expand into US markets, to connect with American investors and large banking organisations, and to foster an introduction to an ecosystem of influencers, within the US. This was also an important opportunity for Innovate Finance to connect with a similar ecosystem of key stakeholders, within the global fintech marketplace.

The future offensive

There are many reasons why the global fintech movement has emerged from the UK – our geographical location provides unrivalled international connectivity; our leading academic talent pool is world-class; we have prime investors and impressive business facilities; we promote global thought-leadership on emerging digital solutions; and we can provide a simple regulatory system that balances risk and innovation. But our job is not done. Fintech firms both big and small, face major innovation and growth challenges. We need to increase our exposure to great fintech opportunities and encourage smart, active investors to enter the fintech sector within the UK.

It’s imperative that we continue to foster leadership skills and talent, and we need to ensure that those skills are retained. We need to continue examining the conditions necessary to create greater competition, to open up the fintech sector to new players, and ensure our SMEs have good access to the capital needed to grow their business. It is vital that we continue to develop and connect the fintech sector in the UK, including accelerators, investors, academic institutions, code clubs, policy makers, big tech and beautiful design. The power of international corporations, need to be exploited.

Last year alone over £500 million was poured into fintech firms by way of investment. So being open to foreign influencers is essential. Indeed, American investors drove significant growth in the UK fintech sector – recent heroic funding rounds include TransferWise (£58million); Nutmeg (£32million); Funding Circle (£40 million). More recently however, Digital Shadows our local success, grew from two people on Level39, to over 30, and is now launching in the US via Passion Capital after having raised £5.2million in their latest funding round.

Financial services: US vs UK

This raises an interesting question about the US v UK financial services sector. The recent ‘Bootstrap to IPO’ event, hosted by Innovate Finance, explored the different sources of financing, from angel investors, to venture capitalists and alternative investment. It also highlighted the cultural difference – the attitude towards risk and the confidence to dominate in a global marketplace. It was said that that there is no lack of entrepreneurial talent or technological innovation when we compare the two marketplaces. But the industry — entrepreneurs, investors and consumers alike — has some way to go.

We need to champion the huge social and economic impact of the sector. We need to get behind these new high growth fintech companies, who are bringing greater choice, diversity and resilience to the financial services sector. This isn’t just the responsibility of the entrepreneur, or the investor. This is the responsibility of all us, as consumers, to ask for and make sure this change happens.

These are some of the concerns we hope to address at our Global Summit on March 9th at the Guildhall. This historic gathering will explore the impact of fintech on society and the economy, and together with over 700 delegates we will discuss how we can overcome challenges to make UK fintech bigger and better – and, crucially, help build a global sustainable banking sector that means something for everyone.

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