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2015: Year of fintech

21 December 2015

2015 has been a year of strong growth for financial technology

This year has seen record-topping investment in London-based fintech companies, hitting £357million according to statistics revealed by London & Partners; the organisation set up by the Mayor of London’s office to encourage investment in the City.

Investment in the UK fintech sector has grown by 136 per cent in the past year alone, while in Silicon Valley, it has grown just 117 per cent, cementing London’s status as the fintech capital of the world.

But what have been the key themes for fintech in the UK in 2015?

Government endorsement

George Osborne recently announced that he wants London to become, “the global centre for fintech”, and is actively encouraging more financial innovation in the UK, citing mobile payments technologies such as Apple Pay as “the shape of things to come” for financial innovation. Earlier this year, he appointed Passion Capital venture capitalist Eileen Burbidge as the UK’s special envoy for fintech, who recently affirmed London’s position as “the jewel in the crown of the UK’s fintech success story."

With the government pledging £10 million towards research into distributed ledger technology, which also underpins Bitcoin, investment in financial innovation and growth are set to continue.

Fintech Code London has a growing stock of technical talent

 New tech on the block

London has a growing stock of technical talent looking to flex its coding skills. Coupled with an entrepreneurial spirit and a strong heritage of financial understanding, the city is driving a global culture change in financial services.

And it is with this combination of skilled fintech brain power and technology that traditional banking models are being reinvented. Barclays Accelerator, Santander and Monitise’s joint fintech investment fund, along with the Visa Europe Collab, show there are no shortage of major financial brands getting involved in the evolving ecosystem.

In his speech of 11 November, Mark Carney, Governor of The Bank of England said:


There will be new firms disrupting the status quo and big firms raising their game in response, with Britain leading the fintech revolution.

These collaborations show the interdependency of established banks and new start-ups. Only in this context will true sustainable success be achieved.

The results so far? KPMG’s recent global fintech 100 list, released 14 December, presents 18 leading companies in fintech from the UK, more than from any other country. In terms of service offerings, these are increasingly becoming cloud-based, API-based and even more customer-centric.

Bit Coin Rise in cryptocurrencies off the back of the Bitcoin explosion

Cautious growth and open minds

Regulators see this changing landscape and are accepting there is an appetite for change. There is a general call for regulation to be wide-ranging in order to free up banks’ ability to pursue new technologies. Mark Carney also made a pledge this year to make innovation in this sector easier. There is no doubt that everyone will benefit from a well-regulated industry that has enough muscle to enable fast-paced change.

Regulators will still keep a watchful eye particularly with the rise in cryptocurrencies and blockchain activities. Off the back of the rise of Bitcoin, financial disruption is perceived as a potential threat to the integrity of traditional banking models. With some 14.6 m Bitcoin units in circulation worldwide, with a collective market value of around £2.2 b, it is right that the UK regulators keep control of Bitcoin and other cryptocurrencies within the UK market.

What's clear is that the fintech developments this year have made the rest of the world stop and look at the UK. As changes to world financial culture take hold, it is clear the UK will be at the centre of developments. Globally, Warren Mead – KPMG’s head of alternative finance - predicts an increase in fintech investment during 2016 from £13 b to £19.7 b. Momentum looks set to continue into 2016 with London at the forefront.

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