British Business Bank chief: UK can steal a march with fintech
4 min read
19 August 2014
As one of the world’s leading financial centres, geographically positioned between the US and the Far East, the UK has without doubt the tools to build on its reputation as the global go-to place for business.
And while Silicon Valley may still capture the hearts and minds of the global technology sector, the UK has the opportunity to steal a march when it comes to fintech – the businesses that provide technology to financial services companies – boasting the capital as its beating heart.
Since 2004, the lion’s share of Europe’s fintech deals have been struck in the UK. We are in the middle of a hugely disruptive period for technology more broadly, and with it comes exciting times for the Britain’s fintech scene.
The days of paper and hard copies are coming to an end as we all increasingly find information via the internet or email on our computers or mobile devices. What’s more, the interaction and response rate to information and data has exploded with the rise of social media and online communications.
It is perhaps inevitable that at a time when the UK is building its reputation for entrepreneurialism and innovation we are witnessing an increased interest in fintech.
The market is huge and encompasses many different sectors within the financial services industry – from banking to electronic payments to insurance to foreign exchange operations.
We’ve recently seen the launch of Innovate Finance, a new trade body backed by the city designed to bang the drum for the burgeoning fintech scene. It will bring together more than 50 member companies to champion UK technology and help accelerate the movement.
Now is the time for Britain to cement its status as the global capital for financial technology, but it is vital we have the right investment structures in place to allow UK talent to flourish.
In order to make the most of this opportunity, we need to be doing more to bolster the sector’s growth. In 2013, one-third of all global fintech financing and 20 per cent of all deals took place in Silicon Valley, while the whole of Europe accounted for 13 per cent of fintech financing and 15 per cent of global deals. Now is Britain’s ‘land-grab’ moment.
Access to funding remains the biggest barrier for the UK’s fintech community. Most of its fintech ventures are still in their infancy, most venture capital investments are still first-round, while the availability of funding remains scarce compared to the US.
It’s vital that we help British firms get the funding they need to grow, so it’s hugely encouraging to see progress made within the lending space, with Santander recently announcing a new $100m London-based fund to help address funding shortages.
Helping provide funding where it’s needed most is precisely what the British Business Bank was established to do. We are working to ensure that finance markets for small and medium-sized businesses work effectively, allowing them to prosper, grow and build economic activity.
There has never been a more exciting time for fintech in the UK. But if Britain wishes to maintain its place as one of the world’s leading financial centres then investment into fintech will have to be at the heart of its efforts.
Keith Morgan is CEO of the British Business Bank.