Kalifa Review: UK Fintech competition must play out on the global stage, not the national
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It’s a well-known fact that the UK is a global leader in Fintech, and that London sits at its helm. In 2020 alone, UK Fintech attracted $4.6 billion of venture capital investment, and some 44 per cent of Europe’s Fintech companies valued at over $1 billion (tech unicorns), hail from the UK.
What is less well known is that clusters of excellence are growing across Britain in the area of financial services and technology. Manchester and Leeds, Glasgow and Edinburgh, Birmingham and the West Midlands are fast establishing themselves, with dynamic start-ups such as Goodbox and SquareBook.
Not far behind are newly emerging clusters of digital finance you may not have thought of before. Cardiff, for example, boasts Weathify, an online wealth management app. Newcastle start-up Caspian Learning, an AI-powered financial risk, has partnered with Nasdaq. Datactics, meanwhile makes full use of Belfast’s emerging cyber and data expertise. Durham is home to the Challenger Bank, Atom, which has raised more $500million thus far.
Clearly the UK’s Fintech story is a national one. But more work is needed to make the most of the unprecedented opportunity that FinTech offers, both on the global stage and as a national success story with the power to level up the country once and for all.
Ron Kalifa’s Strategic Fintech Review, set to be published this week, is a crucial step as the UK pivots to a more global agenda outside the European Union. The review presents five workstreams, one of which analyses the UK’s national Fintech story and steps for strengthening it further.
Tech Nation was delighted to be invited to lead the chapter for the review’s National Connectivity workstream alongside a distinguished panel of Fintech leaders, and to share our recommendations for how the UK can accelerate its national growth.
One of our aims was to generate data points and identify the critical factors underpinning the success of national and regional strengths and boost their connectivity to maximise their potential.
Thanks to new Deloitte data underpinning our contribution to the Fintech Strategic Review, we have been able to do just that. We now know for certain that proximity to academia and graduate talent at a certain threshold, access to both technology and financial services domain expertise in equal measure, and business accelerator support contribution are key foundational capabilities that contribute most to supporting the growth of successful FinTechs around the country.
Also, strong university cultures and good connectivity makes fertile ground for big ambitions.
But varying levels of regional and local governance and leadership for clusters, an inequality of funding leading to unfulfilled growth potential, and a lack of access to real time sector insights, are just some examples of the challenges ahead that could prevent us from strengthening national connectivity between FinTech clusters.
Strengthening our national FinTech hubs requires removing London-centric lenses and seeing the thriving global connections that will allow Manchester, for example, to compete with Frankfurt or Amsterdam.
All FinTech stars regardless of their location should set their sights globally. Encouraging these emerging dynamos to collaborate nationally and compete not with each other, but internationally. This will boost the position of the UK overall in one of our key global industries. Doing so will increase access to the best talent, partnerships, investors, academics and advisors all across the UK.
Tech Nation’s recommendations outlined within the review will play a key role in strengthening the UK’s broad and growing FinTech excellence, helping the nation level up, defending our position as a global FinTech leader.