Three cities that could take London's FinTech crown
One of London’s many crowning achievements is that it has long been a global centre for all things FinTech (financial technology). But has the result of the EU referendum vote threatened to de-throne the city? Andy Harbison looks at the cities keen to take on the title as the new hub for the FinTech revolution.
FinTech in post–Brexit London
Opinion seems to be split when it comes to the subject of London’s future as the premier location for innovative FinTech companies.
A report released last month from Deloitte using research by the World Bank named London as the place to be for anyone in FinTech.
According to the report, London “has the “Fin” of New York, the “Tech” of the US West Coast and the policymakers of Washington, all within a 15-minute journey on public transport".
However, the report also showed that there is a heavyweight contender on the horizon who has the potential to deliver a knockout blow.
Singapore – The heavy hitter
Singapore tied with London as the best place in the world for FinTech companies to set up shop.
The Singapore government seems to have a firm grasp on the economic benefits of becoming the world’s leading FinTech hub, having invested a sizeable S$225m (£133m) towards the development of FinTech projects.
The Monetary Authority of Singapore (MAS) has also created a FinTech innovation lab, a regulatory sandbox for experimentation, and negotiated FinTech co-operation agreements with Australia, the UK and Switzerland.
Israel – The up-and-comer
Over the past few years the start-up economy in Israel has blossomed. In 2009 there were only around 90 FinTech start-ups in the country, with around $13 million USD in capital.
During the last year alone, over $4.5 billion of funding has been generated for start-ups, 500 of which are FinTech companies.
This upward curve of financial disruptors and innovators is drawing the gaze of some of the world's top start-up accelerators. An accelerator provides young start-ups with mentoring, technology and office space to rapidly grow their business.
One of the world’s biggest accelerators, MassChallenge, recently set up shop in Jerusalem, feeling that Tel Aviv was already a leading city in the field.
Barcelona – The new kid on the block
The city of Barcelona might currently be better known for its stunning architecture and world class football team than as a FinTech hub, but that could all be set to change.
Potential is the key word here. London entrepreneurs with itchy feet will not only be considering new cities on their business and finance standing in the international community, but also the quality of life and affordability.
Moving across to tech rich San Francisco may make sense from a business perspective, but eye watering house prices and the sky-high cost of living makes it unlikely that most workers could afford to relocate to the city.
The Spanish city has the advantages of a Californian climate, a healthy local economy thanks to booming tourism, reasonable property prices and an emerging number of innovative start-ups taking on the big boys.
IESE also allows relocating start-ups a tap of local tech talent to bolster their staff numbers.
London – Its own worst enemy?
There is another major city which could cause London to slip down the global FinTech rankings: London.
Earlier this month, Innovate Finance, an independent membership association that represents the UK’s global FinTech community, published its autumn statement with recommendations to the government on the UK FinTech industry.
In the publication, the organisation makes it quite clear that it sees the Brexit vote as a significant threat to the continued prosperity of FinTech in The City, and that measures need to be taken to ensure it continues to be a leader in innovation.
The statement says that one of the main reasons the UK is a world leader in FinTech innovation are the current rules on European workers bringing their talent into the country.
“However,” the report states, “the UK’s leading position in the FinTech world is far from assured especially following the Referendum result.”
To safeguard London’s FinTech standing, the report says “the current administration must make a clear statement reassuring the many EU nationals already working here that their status is not under threat".
Do you agree with our list or live in the next big FinTech centre? Let us know in the comments below.