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Expo 2020 Dubai: The Fintech Landscape of the UK

As The Fintech Times tours various countries around the world at Expo 2020 Dubai the spotlight now is on the UK economy and in particular how fintech has helped shaped it in recent memory.

Highlighting artificial intelligence (AI) and the space sector, the United Kingdom (UK’s) pavilion at Expo 2020 Dubai’s theme is ‘Innovating for a Shared Future’. Based in the Opportunity District at Expo, the UK Pavilion is inspired by one of Stephen Hawking’s final projects, ‘Breakthrough Message;’ according to its website the UK Pavilion invites people to consider what message visitors would communicate to express themselves as a planet should we one day encounter other advanced civilisations in space.

The UK Pavilion at Expo 2020 Dubai SOURCE EXPO 2020 DUBAI
The UK Pavilion at Expo 2020 Dubai IMAGE SOURCE EXPO 2020 DUBAI

The UK pavilion has been a very popular pavilion, attracting visitors from across the world and also the more famous Brits – including visits from Prince William, Duke of Cambridge and a performance from Coldplay. British culture, innovations and other technologies have been on display throughout their various means at Expo 2020 Dubai.

In terms of fintech, there was a recent high-level fintech delegation of a dozen companies that visited the United Arab Emirates (UAE) as part of the Mayor of London’s International Business Programme by London & Partners (L&P), which I had the privilege to be a part of (L&P is the Mayor of London’s Trade and Investment promotional agency that highlights London as a great place to do business, study and visit). This included a reception at the UK Pavillion where the UK delegates had the opportunity to meet various people in the fintech ecosystem in the region.

Why, is the UK considered a leader in fintech?

London is a leading financial and commercial hub
London is a leading global financial and commercial hub – over 2100 fintechs can be found in the capital and largest city of the UK IMAGE SOURCE GETTY

It is no surprise that much of the activity and leadership of fintech is centred in London. In fact, London, already a global financial and commercial hub across various sectors also has fintech to its long list. Globally, for instance, the UK is home to over 2,100 fintechs – this is more than any other city in the world. And within these are some of the most iconic and recognised fintech companies – from the likes of Starling Bank to Revolut to Rapyd to Checkout.com –  the list in many ways is almost a who’s who in fintech.

As a whole, venture-capital firms invested $4.57billion in UK-based fintech companies in 2020, the second most country behind the United States at shy of $20billion ($19.6billion) – this was according to growth platform Tech Nation’s annual report on the tech sector in the UK. During the first half of last year, according to the UK’s Digital Economy Council, UK tech companies raised more than $18billion worth of venture-capital funding.

The country has a unique proposition. For example, it attracts talent from across the world, which for many in the fintech and wider digital sector often find that talent search is a major hurdle. Also, the country has a very much forward-thinking approach. This has been seen for instance with open banking as a whole, in particular with the Open Banking Implementation Entity (OBIE), which was created by the UK’s Competition and Markets Authority (CMA). Its access to capital is also helpful for any startup and other more advanced small and medium enterprises (SMEs). Also, being one of the world’s undisputed leading financial hubs certainly helps. To add, the regulation in the country is world-renowned, which can be seen with the UK’s Financial Conduct Authority (FCA) taking an active role through engaging with banks and new fintech companies on consumer-focused solutions. Some of its successes include a world-class regulatory sandbox.

As stated on the City of London’s The Global City website: “This ideal environment has put the UK at the cutting-edge of fintech innovation – from peer-to-peer lending, to challenger banks, cyber, insurtech, regtech, AI, paytech, tech for good, and blockchain.”

The UK is definitely planning to keep its leadership position. For instance, there is The Fintech Strategic Review, which was commissioned by John Glen, Economic Secretary to the Treasury (commonly known as the Kalifa Review due to Ron Kalifa’s, former Worldpay CEO, lead on it). This was designed to inform the UK Government thinking on fintech ahead of the previous March 2021 Budget. Its main outcome is a five-point strategy that aims to keep Great Britain at the top of the global fintech league tables.

While most of the fintech activity is in London there are other clusters that can be found across the rest of the UK
While most of the fintech activity is in London there are other clusters that can be found across the rest of the UK (pictured is Manchester) – IMAGE SOURCE GETTY

To note, although London has two-thirds of fintechs in the UK, there are other fintech activities and ecosystems beyond the capital city. Deloitte analysed the fintech landscape and across the UK, 25 clusters of fintechs were identified. Among those, 10 were high growth fintechs: a London superhub, three established clusters and six emerging fintech clusters. However, as mentioned, the rest of the country has its other pockets of clusters of fintech activity including cities such as Birmingham, Manchester, Glasgow, Belfast – to name a few.

Louise Brett, the UK and NSE Financial Services Innovation and Fintech Lead Partner at Deloitte
Louise Brett

To follow, at UK Fintech Week last year, at a panel about the UK fintech industry, Louise Brett, the UK and NSE Financial Services Innovation and Fintech Lead Partner at Deloitte, said while commenting on the current state of affairs: “There are roughly 2,500 fintechs operating across the UK, a third of these are outside London. There’s a lot of growth that’s coming outside of London, and if we could connect it, the benefits could really be exponential. Where is that growth? It’s in Cardiff, in Birmingham, in Edinburgh, and in Belfast.

“What we established is that there are 10 high-growth clusters of fintech. The data from the last 20 years suggests that we’ve seen these clusters grow by 16 per cent; when compared to SME growth of 1.3 per cent, and they’re clustering around areas of specialism that are driving that growth, and the 50,000 new jobs we can expect to see in the next three years.”

While looking at across the rest of the world’ many look up to the UK and its leadership stance in the fintech industry. Having seen it develop in its modern form myself after the global financial crisis recovery, it is no secret as to why the country remains to be a best practice for many other places around the world to follow. Despite the UK’s own challenges (such as Brexit or other difficulties), fintech and the wider digital economy will see it play a role in not only the UK’s but wider global economy.

Authors

  • Executive Economic Development Advisor (Emerging Markets) | Contributor

  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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