Do you know your Fintech from your, well, Tech tech? Short for Financial Technology the sector’s start-ups are heading to London.
Fintech is about, unsurprisingly, bringing more technology into the financial sector. From front end consumer UX to more complex back end operations the rapid growth of the industry is part of a drive to introduce more innovation, especially into banking.
Why is London, especially, proving to be so attractive to Fintech firms? Of a list of the top 50 Fintech firms to look out for over the coming year; those startups that are seen as potential game-changers or could become major players, 24 of them are in London. Well-known names like TransferWise, Nutmeg and Funding Circle have been joined on the watch list by companies like Commuter Club, Algomi and Osper.
There are a few factors that make the UK capital an ideal destination for a Fintech start-up. Firstly there is an existing wealth of expertise and talent in the sector. London is already home to some of the world’s most successful Fintech firms – Transferwise is close to being valued at $1bn. It’s also been on the receiving end of a significant amount of funding as there are venture capitalists in the capital looking to invest directly in the sector. The proximity of The City and some of the world’s most prominent financial institutions headquartered in London makes sense for investors to look at the next innovation that can work hand in hand with the traditional financial community and growing technology one. London’s startup scene across technology is hot and there is a wide range of support from the mayor of London as well as government institutions providing an infrastructure that helps startups succeed. This creates a vibrant environment and ecosystem that can only benefit emerging companies looking to expand.
Geographically, London is a great place to do business thanks to its proximity to Europe. It’s easy to travel in and out of the capital and London is an international hub meaning as well as the continent financial centres like Dubai and New York are less than 10 hours away. English is the lingua franca for technology companies and much of the financial world, so London is an ideal base to get started.
The emerging sector is going from strength to strength and it can only be good news for other businesses in London. A sector receiving worldwide interest and acclaim is good for London in terms of employment as well as other services. For Clarendon it means an increase in business travellers looking for somewhere to stay, as well as those relocating who need a base. Business constantly needs to innovate and develop if it is to stay competitive and Fintech looks as though it is the latest string to London’s bow.