The UK’s financial technology sector is seeing record investment, with venture capital corporations in particular supporting startups and entrepreneurs as they take their first steps into a lucrative market.

 

Some key facts:

  • Global investment in fintech firms has tripled year-on-year from £2.6bn to £7.8bn (Accenture)
  • 63% of fintech entrepreneurs perceive London to be the world’s leading fintech city (Startupbootcamp)
  • Fintech companies in London attracted $539m in funding in 2014 – more than half of all European fintech investment (London & Partners)

Sam Shead at Techworld discussed the thriving situation with venture capitalist Eileen Burbidge, who shed some light on why London is such an appealing city for fintech.

 

Market opportunity

Burbidge notes that unlike other sectors, such as publishing or music, the digital revolution is only just reaching the financial services sector, so there’s plenty of untapped potential in the industry. This lag behind other services means new fintech companies can take advantage of the latest innovations, such as big data, the cloud, and mobile.

She also says: “Fintech business models tend to be straightforward and cash generative from day one”, a (potentially) high-profit simplicity that proves very attractive to investors.

 

Support

It could be easy to view the big financial institutions as a threat to fintech: however, banks are spending more than £10bn a year on financial technology, while some are offering fintech accelerator programmes to startups.

 

Location

With a widely-spoken language and on Greenwich Mean Time (GMT), London is in a unique position to transact with the whole world in the same business day. The city also boasts the headquarters of 300 world banks, demonstrating its credentials as a world-leading financial hub.

Read Shead’s full article here.