UK takes Silicon Valley’s crown as world’s FinTech capital - EY report
The UK is now the world’s leading centre of financial technology – or FinTech – according to an independent EY report.
The report, commissioned by HM Treasury, ranked Britain first out of the world’s seven leading FinTech hubs, ahead of Silicon Valley, Hong Kong and Australia. The research examined each region’s talent pool, access to investment, policy environment, and the demand for FinTech services.
While the UK was ranked first overall and came in as having the strongest policy environment for FinTech companies, California was found to have the best talent pool and availability of capital.
Silicon Valley has a FinTech talent pool of 74,000 people, compared with 61,000 in the UK, and attracted £3.6bn in investment, compared with Britain’s £524m.
What is FinTech?
FinTech is a term to describe the sector of companies that use technology to deliver new solutions in banking, loans, investment management and other financial services.
Some of the UK’s most well known FinTech companies include:
- Funding Circle: A peer-to-peer business financing company that allows savers to lend money directly to small and medium sized businesses.
- TransferWise: An alternative international currency transfer service that matches people looking to send currencies in different directions.
- eToro: A social trading investment network that allows users to follow and copy top traders.
- Nutmeg: A ‘DIY’ online investment management service for consumers.
EY warned that “strong” competition from other regions is emerging and said that it is vital that the UK keeps up its pace, particularly as the sector approaches “critical mass”.
Some regions are “increasingly progressive” in their use of government and regulatory policy to support FinTechs, while others are beginning to specialise in disruptive technologies, including China, the report said.
The world's top FinTech centres
- New York
- Hong Kong
Australia was praised by researchers as an “up and coming” FinTech centre, while Hong Kong, which was ranked last out of the seven regions, was described as an “emerging market” with potential.
Chancellor George Osborne said that the UK Government had achieved its aim set in 2014 of Britain being the “global capital of FinTech”.
He said: “We have the most supportive tax and regulatory regimes in the world for FinTech, and we have the world’s leading FinTech ecosystem. We are defining the future of global banking right here in the UK.”
Source: GOV.UK and EY