There has been a lot written about London’s status as the “FinTech Capital of the World”. Good thing much of it’s true.
Let’s start with the stats. Record-beating sums of venture capital and private equity investment (it tripled last year). Billions of economic activity projected (FinTech is cited as one of three sectors that will be worth a combined £300bn to the UK economy by 2020). Thousands of new jobs predicted for the next decade – a wealth of talented people ready to found or join FinTechs should things start to slow in London’s £60bn plus financial services sector. Global financial brands who have not only got with the FinTech programme, but who are also busy creating programmes of their own. Witness UBS’s launch of its own Blockchain lab at Level39.
London’s FinTech accelerators, too, play a significant role in shaping the city’s global constitution. Accenture Innovation Lab’s 2015 cohort features start-ups from Europe and the US. Barclays TechStars Accelerator’s hotly anticipated second year launched in March, and StartupBootCamp FinTech is currently scouting the world for game-changing technologies, applying its own high-quality filters to build great businesses from brilliant ideas.
As we write, there are over 1000 FinTech businesses active across Europe’s FinTech hubs. But there is also growing interest in London’s FinTech sector from much further afield.
Australia is leading a trade mission to London during Tech Week. And in recent months, we have personally seen interest from India, Hong Kong, Singapore, South Africa and South Korea.
None of them are here for the canapés – plentiful as they are on the circuit. They’re here because of a FinTech-friendly business environment, where (good) innovation is getting funded, and where contracts – often lucrative ones – are being won by technologies who are helping financial institutions to stay relevant to their customers.
What many have also heard of, and want to know more about for their own communities, is the highly collaborative London ecosystem whose various constituents are creating a very favourable environment to get business done.
What can they expect at the sharper commercial end? What do buyers and investors here want? Here’s a short list, by no means exhaustive, that our contacts tell us they are looking for:
What investors tell us they are looking for
- Crypto currencies – (enterprise platforms or the new remittance?)
- New Asset Management business models
- Insurance models that either challenge existing providers or help them to reach new customers / deliver new services
- New alternative lending models – a big opportunity for emerging markets
- Technology platforms that enable banks to stay competitive
What banks and financial services tell us they are looking for
- Artificial Intelligence
- Predictive analytics:
- One bank told us: if we had to start a transactional bank again, we would leverage cloud services and only develop bespoke systems where it makes sense from a competitive perspective
- Crypto currencies
- Risk, Regulation and Cyber Security
Let’s add one of our own: technologies that reach the billions of people worldwide who do not currently have access to financial services.
Of course, London’s FinTech future does not rest on the volume of innovation alone. The city is growing businesses of scale and they’re getting attention from much further afield. If London prizes its “Global FinTech City” status – it might want to hang onto them.