One of London’s strongest attributes has always been its ability to reinvent itself – and the success of the financial technology (or FinTech) sector shows this characteristic coming to the fore once again.
Since the financial crisis, the explosion of companies specialising in financial technologies has brought innovation and prosperity to formerly run-down areas of the City fringes, revitalising Shoreditch, Old Street and King’s Cross as new business hubs. More than 44,000 people are now employed by FinTech companies across the UK – more than in New York or Silicon Valley – and investment last year tripled to $12.2bn. One thing is for sure: FinTech’s success cannot be underestimated, and it is now vital to London’s future as a financial centre.
The startups that are pushing the boundaries and thinking creatively to generate the next big bright ideas are an integral part of the financial services industry’s new landscape. Big banks are investing in startup accelerators because they know that innovation can’t simply come from their IT departments. Angel investors, meanwhile, are continuing to finance the next generation of talent.
Some of these companies will necessarily fail, but the best will go on to challenge the City’s existing firms for a place at the top. In the twenty-first century City, FinTech is an important sector in its own right; companies from the technology, media and telecommunications sector were the biggest group of new occupiers in the City last year.
This is one of the many reasons why the City of London Corporation takes an active interest in FinTech, working with Innovate Finance to accelerate the growth of the industry and help create the services that consumers and clients need to take their businesses to the next level. And what we saw at the FinTech Global Summit in early March is testimony to the current vibrancy of this sector. But for this growth to be sustained, we must have access to the top talent – wherever it may be.
This means ensuring that the visa process is smooth and simple for skilled employees from all countries, but it also means looking closer to home. Despite the City thriving in part because of the contributions from international workers, employers should not miss out on the opportunity to develop and benefit from talent in the disadvantaged areas that surround the Square Mile.
A study by the Boston Consulting Group has calculated that stalled social mobility is costing the UK between £56bn and £140bn annually in lost GDP. It’s vital that businesses work to develop the talent of local workers from all backgrounds, to safeguard against skills shortages in the future and to build a sustainable local economy. I spoke at the “London Works” event we hosted at the Guildhall on Thursday on just this topic. As the dynamic FinTech industry takes off, Londoners from all walks of life must be able to share in its prosperity.