The Welsh fintech scene is expanding the financial services industry in Wales beyond its historical areas of strength, which indicates the increasing importance of the industry and its potential for future growth.
That’s according to a new annual report from FinTech Wales, the not-for-profit independent membership organisation for the fintech and financial services industries in the country.
It’s the organisation’s first in-depth report on the state of fintech in Wales, with a focus on four key pillars: skills and talent, ecosystem and community, funding and investment; as well as promotion of Welsh fintechs and Wales as a place for organisations to thrive.
More than 1000 jobs were created in Wales in the fintech sector over the past year. Companies including Sonovate, Delio, Pepper Money, Wealthify, Credas and Principality Building Society have expanded their workforces in 2022.
London-based challenger banks have also started scaling their businesses in Wales, including Starling Bank, which has doubled its headcount in Cardiff. Meanwhile, FinTech Wales’ own accelerator programme has also created over 100 jobs over the last year.
CEO Sarah Williams-Gardner, comments: “This is the first year we have published a report outlining the state of fintech in Wales. FinTech Wales is proud to be able to highlight the fintech excellence we have here in Wales; to see the emerging, scaling and established members in the ecosystem making an impact on the global stage.”
Developing fintech skills
However, despite the delight at 1000 jobs created in the fintech sector in Wales, the organisation has warned to be mindful of the skills required to fill these roles now and in the future.
Williams-Gardner says: “Wales boasts extremely high-quality universities, which contribute to the skills pipeline, and our mission is to continuously develop our Skills Strategy by collaborating with members, universities, and education and training providers to increase this pipeline further. Once we have made sure all fintechs in Wales have the skills they need to succeed, our next step is to become a globally recognised export of talent.”
The global investment environment with Welsh fintechs has slowed down from the previous 12 months, with £12million raised (up until October 2022), compared with £24million in 2021. Welsh angel investors contributed around £386,900 in funding to fintechs in 2021/22 and £520,000 in 2020/21, and are key to
companies closing initial rounds, according to data from Angels Invest Wales.
Wales wants to influence change and developments to close the funding gap. It calls for experienced founders and mature companies to share learnings and reinvest in more nascent businesses.
“We have great partnerships with investors and influencers all over the world who recognise that Wales is the fintech hub of excellence and want to be part of our community,” the organisation says.
According to research from the Welsh Government, of the 1,900 active financial services companies in Wales, 128 can be classified as fintechs while there are over 100 cybersecurity businesses and approximately 70 involved in financial AI and software operations.