In the first half of 2021 – a period that coincided with a full-on second wave of the Covid pandemic – Britain’s fintech industry drew in investment to the tune of $5.6 billion, according to figures published by Innovate Finance.
No surprises there perhaps. The financial technology segment has been the poster child for the U.K. innovation economy for so long now that we tend to take it for granted. We might even assume this is a corner of the technology market that can pretty much look after itself. From payment apps and money management tools to mobile-first challenger banks, consumers have embraced digitized financial services, Meanwhile, incumbents in the market have been buying in technologies to underpin their own digital transformation plans. This is a sector with momentum.
But perhaps we shouldn’t assume too much. At the beginning of this year, the U.K. Treasury published the findings of a review by Ron Kalifa into the kind of support required to ensure that Britain’s fintech industry continues to not only grow but also establish a global leadership position.
As the year draws to a close, some of the measures recommended by the report are being put into practice. But why were they needed and what will they achieve?
One person who might have the answer to that question is Janine Hirt, CEO of Innovate Finance, a trade body established to represent and promote the global fintech industry in the United Kingdom. When we spoke in mid-December I was keen to find out more about the challenges facing the sector in the months ahead and how they can be addressed.
Hirt is – to say the least – highly optimistic about the prospects of fintech, pointing out that with $5.6 billion raised in the first half of 2021, the industry is on track for record investment over the year as a whole. Equally important, thanks in part to the strength of the wider financial services industry, the U.K. is one of the global leaders in fintech development, with London in particular regularly in the top five when important hubs are ranked.