The Department for International Trade has this week published an excellent report into the UK FinTech market. The ‘State of the Nation’ report has been published with backing from HM Treasury and Innovate Finance and looks at the overall UK market including several key regions.

Whitecap contributed to the report, co-authoring the Northern Powerhouse section with Chris Sier, the HM Treasury FinTech Envoy and Chairman of FinTech North. It was published in the same week that Innovate Finance announced the creation of the National FinTech Network, and is another positive step towards recognising and helping develop the UK’s overall FinTech capability.

The report claims the UK is the undisputed FinTech capital of the world and says this position has been built on 3 key factors:

  • The strength of the UK in financial services
  • The nature of UK consumers
  • The UK regulatory environment

The report can be downloaded via the link below but we thought it would be useful to extract 20 key statistics that are quoted in the report, including their sources:

  1. The UK Fintech sector generates revenue of £6.6bn  per year.
  2. $3.3bn of VC, PE and CVC investments were made in FinTech in the UK in 2018.
  3. There are estimated to be over 1600 FinTech firms in the UK, expected to more than double by 2030.
  4. 76,500 people work in FinTech UK-wide, a number that is set to grow to 105,500 by 2030 according to an Innovate Finance/WPI Economics joint report in 2018.
  5. 42% of workers in UK FinTech are from overseas.
  6. UK’s FinTech adoption rate is 42%, against a global average of 33%. (42% of digitally active adults using the services of at least one FinTech firm and more than 20 million people using banking apps).
  7. 56% of traditional financial institutions have put disruption at the heart of their strategy and 82% of incumbents expect to increase FinTech partnerships in the next three to five years.
  8. There are 89,000 finance and insurance firms in the UK and with a workforce of 64,000, London has the world’s highest concentration of financial and professional services firms.
  9. 60% of respondents to The UK FinTech Census 2017, prepared by EY and Innovate Finance, stated that attracting qualified or suitable talent was their biggest challenge.
  10. Women represent just under a third of total staff in the FinTech sector, and the FinTech Census showed an average of 83% males and 17% females on executive teams across respondent companies.
  11. The majority of financial services CEOs in the UK (62%) believe that a focus on emerging technologies is the number one driver that will separate high-performing firms from the rest.
  12. The UK is home to more billion-dollar startups than anywhere else in Europe.
  13. Since 2013 the FCA’s innovation hub has provided support to over 500 businesses.
  14. Since 2016 almost 100 firms have tested products in the FCA sandbox.
  15. Digital tech companies in London are the most connected in Europe, second only to Silicon Valley for international connections. 25% of entrepreneurs across the world report having a significant relationship with two or more entrepreneurs in London, compared to 33% for Silicon Valley.
  16. The UK was in the top three countries for total capital invested in digital tech companies from September 2016 to August 2017, behind only the US and China. Only the US has a higher number of deals.
  17. Total investment and number of deals in digital tech companies have both risen significantly since 2012. From £984 million in 2012, spread over 870 deals to £3.3 billion in 2016 over 2645 deals.
  18. London is frequently associated with FinTech startups and represents 84% of VC, CVC and PE investment volume, although it is acknowledged in the report that there is also considerable activity outside the Capital.
  19. Almost all of the UK’s premier FinTech accelerators are based in the East End, and 85% of the accelerators attended by UK FinTech firms are in London.
  20. The latest estimates put the number of accelerators operating in the UK stands at 186 and the number of incubators at 205 . According to research, the average accelerated company raises 44% more funding and achieves a 75% higher valuation than those that do not.

In the report, the UK government recognises the positive impact that FinTech has had on financial services, making it easier, cheaper and faster for consumers and businesses to access products that better meet their needs. It also acknowledges FinTech addresses the needs of underserved markets, including the financially excluded, and it helps to tie together an increasingly interconnected world, promoting trade and global growth.

As the FinTech sector matures, on the back of an increasing demand for technology in financial services, the importance of the sector in sustaining growth will increase further.

“Whether it be investment in FinTech, the role of the regulator, government policy or the abundance of skills, talent and diversity; the UK has laid solid foundations for its future in the FinTech industry.”

The Rt. Hon the Lord Mayor of City of London Peter Estlin

“The UK is the leading global FinTech hub with a thriving ecosystem and international talent pool spanning the whole country. With an increasing number of FinTech firms exporting globally from the UK, we are continuing to set the global standard on the application of technology, and more broadly, innovation in financial services.”

The Rt Hon Liam Fox MP

DOWNLOAD THE REPORT