London becomes fintech investment hub
The UK has seen fintech investment rise by 500% in the past three years, according to Robert Walters. This compares to just 170% in the USA and 133% in Europe.
So far this year, London fintechs have generated $114m in investment; in the whole of 2017, they generated $148m. Fintech remains London-centric, however. In 2018, there were 50 fintech deals of $1m or more in the UK; 45 of these were in London. In 2019, there were 96 investments in UK fintechs, but only eight were in regional businesses.
Tom Chambers, senior manager – technology (London) at Robert Walters, comments, “Fintechs were not initially seen as direct ‘competition’ to traditional banks – with their products and services differing vastly.
“However, over the past 12-18 months we’ve seen fintech’s apply for banking licenses which means they can now expand their offering to include overdrafts, guarantee deposits, and the ability to set-up direct debits.
“Perhaps the most drastic change was governments swift action to ‘shake-up’ traditional lending and allow fintech companies to be an official loan provider for the government COVID-19 bailout scheme - introducing fintechs to the masses.
“As fintechs creep into traditional banking territory, and financial services continue to embed technology into their processes, the sectors stand to become indistinguishable in the next year.”
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