UK start-ups profit from an abundance of tech talents, regulation and London’s financial infrastructure. While they received more money than all continental European FinTechs, London’s role as a hub is threatened.
Worldwide, 49.7 billion US-Dollars have been invested in financial technologies between 2010 and 2015. Start-ups from the United Kingdom have received $5.4 billion, while the rest of Europe could not even match that amount combined. Continental European FinTech companies have received just $4.4 billion, says Fintech Week London.
Thereby, London-based financial technology companies profit from its infrastructure and talent pool. Jason Purcell, CEO of specialist investment bank FirstCapital, says on Forbes that “London’s access to pan-European, US and Asian investors, and the number of high-profile accelerator programmes in the Capital, plus strong government advocacy for fintech” gives UK companies a head-start.
The Financial Conduct Authority has initiated a “regulatory sandbox” that allows businesses to test out new financial products and services without incurring all the normal regulatory consequences of these activities. Besides, the government has introduced tax breaks for start-ups and hubs. Finally, growth is boosted by London’s well-established advisory sector and a strong venture capital base.
However, Berlin and Stockholm are emerging as additional European financial technology centres. While Berlin has a vital start-ups scene in place and produced notable FinTechs, Stockholm receives attention only since 2014. According to the Stockholm School of Economics, Sweden received 18 percent of all European FinTech investments.