This was a 90-minute webinar that focused on a Regional FinTech Ecosystem Analysis that was hosted by Whitecap Consulting during UK Fintech Week.
Regional updates were given by the Whitecap Team:
Julian Wells – Director and FinTech Lead (Chair)
James Thwaites – Associate Director, North East
Stuart Harrison – Associate Director, South West
Eleanor Simmons – Consultant, Manchester
David Mellor – Associate Director, Midlands
And guests included:
Chris Sier – HM Treasury FinTech Envoy & Chairman, FinTech North
Peter Cunnane – National & International Policy Lead, Innovate Finance
An interesting webinar, it included novel research produced by Whitecap over the past 12-months that analysed the success of FinTech regions outside of London. It is thought that FinTech related workers in the capital number around 44,000, yet figures outside of London remain unclear. Therefore, Whitecap has focussed its analytics on five emerging regions: the North East, the Leeds City Region that encompasses Yorkshire and the Humber, Greater Manchester, the West Midlands, and Bristol & Bath.
One of the first items webinar took us through was the issue of quantifying the definitions of FinTech’s outside of the capital hotspot. In order to do this Whitecap outlined the three categories that they have used in their assessments: FinTech startups and scaleups, established financial/FinTech businesses, and Tech firms who, possibly alongside multiple sectors, service the industry.
Using these categories, Whitecap was able to measure the number of FinTech firms, something which hasn’t really been tackled since the original UK FinTech census in 2017 that quoted the UK as having “1,600 FinTech firms”. While the census has since been updated, this figure has not – so Whitecap set about to conduct their own measurements. Established as a regional strategy consultancy headquartered in Leeds, they have used their offices in Manchester, Milton Keynes, Birmingham, Bristol, and Newcastle to put together insightful reports on the regional FinTech scene.
The North East is the home to Sage, the UK’s largest listed technology company, alongside others such as Atom Bank, Newcastle Strategic Solutions, Virgin Money, and Tesco Bank, who have recently created 430 new tech jobs in the area.
This latest report, the first of its kind, identifies 58 firms in the North East that are active in the FinTech sector and has a higher percentage of startups than in any other region. It estimates that around 3,000 people currently work in FinTech related roles with 53,000 employed overall in the financial services and technology sectors across the region.
Bath & Bristol looks to be the most active region surveyed so far, with a high population of fairly young FinTech startups, averaging at around three-years-old. It also has more participants than any other region outside London in the FCA’s regulatory sandbox, which allows businesses to test innovations in the general market. Alongside new technology there is also an established financial sector with over 3,400 people working in FinTech related roles in the region, and 61,000 employed overall in Financial Services and Technology sectors.
This is the second report on Leeds that Whitecap has produced, the region remains the only UK city outside London where each of the three major credit reference agencies has a main office, and there are over 40 established financial organisations based here alongside three of the top five building societies.
Since 2018, Leeds has doubled its amount of FinTech startups and scaleups thanks to an injection of co-working hubs and spaces in the area with Nexus, Barclays Eagle Labs and Santander Work Café (all in the city of Leeds), and Phase One (based in York) amongst the new additions in the region. They estimate that around 6,300 people work in FinTech related roles.
The Greater Manchester ecosystem was found to have 49% of scaleups, the highest proportion identified in any of the regions so far. It also employed the most amount of people in FinTech roles outside of London at almost 8,000.
Factors here include the availability of higher education within the area that includes not just staff for the sector, but also funding for innovation. Greensill, a leading British FinTech company founded by Lex Greensill, an Alliance Manchester Business School MBA alumnus, recently provided £2.5m to support The University of Manchester’s understanding and sharing of FinTech expertise across business communities locally, nationally and globally.
The most recent report, yet to be fully published, outlined the presence of established financial institutions within the region, including banks, building societies and mutual trusts but also the biggest office of accountancy firm, Deloitte outside of London.
An expanding group of startup and scaleups with scope for significant growth, Birmingham is the youngest city of Europe with under 25s making up 40% of the population thanks to its nine universities. Proximity to London means that the region is supporting the capital rather than competing and is due to be enhanced with HS2. Over 7,000 people are estimated to work in FinTech related roles locally.
After these recaps, Chair Julian Wells brought in guests Chris Sear and Peter Cunnane, who were keen to highlight the effects of COVID-19 and what would be waiting for the FinTech sector in the regions once working life continues. Whereas Peter was ‘glass half full’, acknowledging the support and opportunities on offer for the FinTech sector after our time working remotely, Chris was wary that they delay in getting the country back on track would put the UK on the backfoot globally.
However, they both agreed that there is a clear need for new data in the FinTech sector where possible, especially when vying for international investment and trade, both of which could be a real possibility in the long-term.