UK fintech firms expect higher than average growth over the next few years as London remains a top destination for business.
UK-based financial technology firms expect 88 per cent growth over the next three years, topping the average country's expectations, according to a global fintech survey by theLondon Stock Exchange Group and TheCityUK. Only Germany expected a higher rate of growth.
A large majority (85 per cent) of the companies surveyed said they were very or reasonably likely to raise funds on public markets within the next three years, and 38 per cent picked London as their top destination, second only to New York.
Compared to their peers in other countries, UK-based fintech firms see the process of raising money through the public markets as more straightforward with fewer barriers.
International growth is a priority for the majority (72 per cent) of firms, and the UK was identified as a top-three market for businesses looking to expand across boarders.
While regulations are becoming more cross-boarder in nature, they remain a barrier to growth. The UK is one of the countries playing a leading role in reshaping the global financial regulatory services landscape, including the Financial Conduct Authority's global "sandbox" plans, which could allow firms to conduct tests simultaneously from London into different jurisdictions.
That would mean fintech firms around the world could come to the UK to test their products in multiple markets.
The UK's fintech sector contributes about £6.6bn to the country's economy each year, and it employs more than 60,000 people across 1,600 companies.
"As this report shows, we’re a global leader in fintech not by accident, but by design – our outstanding expertise, robust regulation and fair taxation gives us an edge above the rest, and we’re committed to ensuring that it stays this way," said John Glen, economic secretary to the Treasury and city minister.