It’s easy to underestimate the power of Britain’s tech industry. While startups from Silicon Valley and China suck up all the room from media press briefings, British startups have been developing and innovating very much under the radar. The UK is now home to over 4,799 startups, many of which are in the financial technology (FinTech) sector (Startup Rankings).
In the latest Global Financial Centres Index, London came out on top, beating New York (Z/Yen, March 2018). A combination of financial talent, government support, and a reputation as a financial center built over centuries helped London cement its position. Now, billions are pouring into to ensure the financial hub evolves and stays on the bleeding edge. From 2016 to 2017, the amount of money invested in London-based FinTech startups doubled to nearly £800 million (Tim Focas, Financial Times, November 21, 2017).
Startups like Transferwise (recently moved to Estonia), Yielders, Lending Club, and Monzo have had a tangible impact on the country’s economy and the lives of millions of people. Later this year, peer-to-peer SME lender Lending Club plans to launch an IPO that could value the firm over £2 billion (Mike Knight, Fathom London, April 23, 2018). Yielders has single-handedly catapulted London to the top of Islamic FinTech with its Shariah-compliant property investment crowdfunding platform. Transferwise, London’s most well-known fintech giant, has already claimed over 10% of Britain’s overseas money transfer market. The company became profitable last year (Neil Ainger, CNBC, May 17, 2018).
At the center of the revolution was London’s Silicon Roundabout. Since the term was coined in 2008, thousands of startups have flourished in the area, with some of the biggest names in tech - Softbank, Google, and Facebook - investing there. According to some estimates, the area is still likely to create more than half a million jobs over the next few years, attract billions in investment, and offer tech workers salaries that are more than double the median individual income (The Telegraph, 2018).
The services and platforms sprouting up in London’s tech hub are streamlining an industry ripe for disruption. Slashing bank fees, increasing access to SME loans, helping entrepreneurs crowdfund their projects, and bringing low-cost digital banking to millions has had a tangible impact. Going forward, there’s little doubt London’s reputation as a FinTech hub will help it retain its position as the global financial linchpin.