“In the Chancellor’s speech earlier today she laid out a much needed road map for investment in long term infrastructure in the UK. Next up, in the spring, she needs to overlay that with a convincing Industrial strategy to deliver short and medium term improvements in growth and productivity, underpinned by this long term spending. A key element of this Industrial strategy is innovation, and central to innovation is the contribution of FinTech. Having produced 21 of the UK’s 40 unicorns and made up of highly productive firms that are generating strong growth, the UK FinTech sector has a clear track record of sustained growth. If the UK is to create leading technology companies to rival those from the US, these are most likely to come from the FinTech sector.
FinTech firms are also transforming financial services to make the sector more inclusive and more democratic - putting consumers, both individuals and small businesses, back at the heart of the industry.
I think it is fair to say that many FinTech industry leaders, entrepreneurs, and founders feel a sense of frustration right now about the opportunities that lie untaken in front of us. We want to see things progressing faster: we need to see a tech-positive regulator that helps advance areas such as open banking and open finance, digital assets, crypto, and BNPL; we need clarity; and we need stronger incentives to keep and build our incredible, global entrepreneurial community. Make no mistake that the opportunity which lies in front of us is enormous: our FinTech Plan for Government identified £328bn which can be added to the UK economy if the sector is properly supported and continues to flourish.
Our recently released FinTech investment numbers for 2024, however, paint an interesting picture. The UK is still a global leader when it comes to FinTech, securing more investment ($3.8bn) than any other country in the world bar the United States. And yet - we have lost our crown of leading all of Europe combined in FinTech investment. This is important because it means other regions and nations are quickly picking up pace, and we can no longer stand still if we are to maintain our leadership in financial innovation.
Amongst this need for continued progress, I think it must also be said that here in the UK we have a tendency to talk ourselves down. We need to become better at championing our strengths, and celebrating success. We are a global FinTech superpower because we have the most amazing community of incredible entrepreneurs, founders, and innovators that are passionate about driving positive change within financial services. The members of Innovate Finance’s Unicorn Council, the CEOs of the UK’s highest growth FinTechs, embody this, as do the founders of the most promising early stage startups that choose the UK as their home. I would argue that our diverse UK community is unparalleled and unrivaled by any other country in the world. Our universities and academic sector is second to none. We are an international hub for financial services and technology. We create more unicorns than anywhere else in the world bar the United States and China. The total capital raised in the LSE was up 31% year on year in 2024. And we have a government who has committed to supporting FinTech, as can be seen by the confirmation of FinTech as a priority sub-sector for the government's FS strategy and de facto its industrial strategy.
And, looking out at the shifting geopolitical landscape, to borrow a phrase used by Dame Julia Hoggett, CEO of the London Stock exchange, the UK now stands as one of the leading “common sense” countries in the world.
At the same time it is clear that 2025 has got to be the year of delivery and action if we are going to maintain our global FinTech leadership and harness the full power of financial innovation to help drive growth across the country. We need to rethink our regulatory framework; supercharge our capital markets, encourage investment, and ensure we have a business and tax environment that is attracting international entrepreneurs and enticing home-grown ones to stay here. Government, industry, and the regulators need to come together, take action, and commit to moving in the same direction to support the exciting, growing firms that make up the UK FinTech ecosystem. There is far too much at stake, and far too much to lose - for our sector, for the UK economy, and for the UK consumer - if we don’t.”
Janine Hirt, CEO of Innovate Finance
