The UK FinTech story has been one of success, triumph over adversity, resourcefulness, courage, ingenuity, tenacity and good old fashioned hard work.

These core values have propelled the UK to become a key player in the world of Financial Technology, second only to the United States in terms of funding, and the creation of jobs and wealth.  It is also a story of community, inclusion and mutual support.  With a UK General Election coming in 2024, whoever forms the next Government would do well to build on the successes of the past and protect and nurture the UK’s leadership position long into the future. Some great proactive thinking has already been done on this by the team at Innovate Finance which recently published its own detailed manifesto to guide the next Government in how to support the future of UK FinTech.

In UK FinTech, London is not the limit 

London is an obvious focal point for UK FinTech, but would it surprise you to know that just six of the top ten UK FinTechs (as ranked by FinTech50) are based in London? This means that four of the top ten are headquartered elsewhere in the UK.

We are proud to have collaborated with Innovate Finance and Whitecap Consulting to produce the  ‘Scaling Regional UK FinTech’ research report, which is the first report of its kind to chart the world of regional UK FinTech.  The report analyses the data on the growth trajectories of 250 regional FinTech businesses which have successfully moved from startup to scaleup. The project also involved detailed interviews with ten of the most successful founders and CEOs, gaining their experiences, insights and more importantly, tips for growing FinTech businesses.  

The response to the report has been very encouraging and it is quickly becoming the ‘go-to’ source of data of this kind, as the most meaningful study of the UK FinTech business ecosystem since the Kalifa Review of 2021.  

The research brought to light several interesting insights, which we have highlighted in our report summary. 

What stands out for me, is that nine out of ten FinTechs that attend a business accelerator or incubator program go on to successfully raise funding when they need to. The network of contacts and mentors involved in accelerators clearly do help FinTechs to scale, as does the advice they receive on running their businesses, right up to coaching on presentation content and delivery skills.  

Our report was launched at IFGS 2024, and was followed by a fascinating panel discussion which added further insights to the scaleup story.  Entitled “Investment Impact:  Insights from across the UK”, the panel was moderated by Nicola Anderson, CEO of FinTech Scotland, and comprised founders of FinTech businesses from across the UK’s regions. 

During this discussion, the panel shared experiences about their own funding and scaleup journeys, but what came across as a major feature was the sense of community and mutual support that is out there for aspiring FinTech entrepreneurs. This local support network is one of the main reasons that the UK Regional FinTech sector is such a success story.  

Every region is an incubator, with big business on its local doorstep 

In the regions across the UK, FinTechs are clustering to form communities which support each other, in much the same way that businesses joining accelerators and incubators do.  That is to say that within each region there are groups of FinTechs, communicating with each other, sharing ideas, sharing contacts, working together and solving each other’s problems.  

Along with regional banks, building societies and other regional financial firms, there are also an increasing number of London-centric banks and financial institutions who, whilst headquartered in London, have major operations across the UK, and more financial organisations are moving many of their operations out of London to manage critical services and build centres of excellence.  In today’s world, you don’t need a London address to service London headquartered businesses.  

Add to this the fact that HM Treasury has chosen Darlington in County Durham as its new home for certain departments, and growing businesses are increasingly choosing to set up their headquarters away from the South East, and the key message here is: ‘look beyond London’.

#Takethetrain

The ‘Scaling Regional UK FinTech’ report provides advice based on the data and experiences uncovered, including why diversity is important to revenue growth, along with many other important lessons, but a main takeaway for scaling FinTechs is this: There are very talented, experienced and connected people in your area, all of which want their ‘home’ region to prosper.  Get out there and meet them!

Also in each region, trade organisations and industry associations are growing and making a difference to their local economies, providing further support, insights and networks.

Just looking at FinTech Scotland alone, as its CEO Nicola Anderson moderated the panel mentioned above, and the organisation has more than 220 startup and scaleup businesses as members, and has relationships with 15 universities and 16 tech spaces across the region.  It regularly holds events and is an active facilitator of this growing FinTech region.  

There are already industry associations in most regions now, but this continues to develop.  FinTech Northern Ireland, SuperTech West Midlands,  FinTech North, FinTech Wales,  FinTech West, Tech East, The Centre for Finance, Innovation and Technology (CFIT) , The FinTech Alliance and the FinTech Growth Fund are just some of the bodies in the UK to help FinTechs in their regions and across the UK as a whole. 

So for the aspiring FinTechs out there looking to build a business, graduates looking for FinTech roles, investors looking for opportunity, or financial firms looking to find the right FinTech partner, the message is absolutely the same:

Take the train out of London, visit some of these vibrant and innovative regional FinTech communities, you will be very pleasantly surprised by what you will find and you’ll certainly be met with a warm welcome.

Andrew Dunn, Practice Lead