Financial technology (FinTech) is one of the United Kingdom’s fastest growing business sectors. In 2017, British firms attracted a record $1.8 billion in venture capital investment – a massive 150 per cent hike on the previous year. So it’s no surprise other nations want to mirror its success.
The UK benefits from a FinTech crown jewel. London is lauded as the number one global FinTech hub, boasting the world’s largest financial services industry, a booming tech sector and some of the hottest start-ups around. Thirty-one of the 50 top FinTech companies call the city home. Add to that a burgeoning talent pool and backing from both regulators and policy-makers and it’s easy to see why the capital is leading the field.
“Global FinTech continues to grow at a breathtaking pace with new entrepreneurs, investors and hub ecosystems emerging on a regular basis. With many of the first-order benefits of FinTech flowing to where they are needed most: making financial services simpler and more accessible. I am excited about the role Deloitte is playing in supporting emerging FinTech hubs and the ecosystem participants.”
Firm foundations in the United Kingdom...
We’ve played an important part in the story. We developed a FinTech Strategy with industry body TheCityUK and have helped the ecosystem to thrive. We authored the Global FinTech Hub Federation report 'A tale of 44 cities, our Global FinTech Interim Hub Review', published in 2017 and joined forces with Upside Partners to help our clients thrive with FinTech: by adopting a venture capital mindset, acquiring start-up empathy and collaborating effectively.
In March, we were once again the platinum headline sponsor at trade organisation Innovate Finance’s Global Summit.
During the same month, our Head of NWE FinTech, Louise Brett, was among leaders appointed to a new FinTech Strategy Group, set up by Innovate Finance and the City of London Corporation.
“Today, London is the FinTech capital of the world and we’re delighted to have been involved from the start,” says Louise. The ecosystem has the 'Fin' of New York, the 'Tech' of the US west coast and the policymakers of Washington, all within a 15-minute journey on public transport. These factors make London one of the greatest connected global cities in the world with the key ingredients for digital success."
Nurturing FinTech communities
What is an ecosystem? It’s a network of bodies and organisations, from schools and universities to start-ups and financial institutions, that form a FinTech community. In cities and regions across the world, for example Manchester and Canada, we’re developing new ecosystems. They nurture talent, embrace disruptive technology and accelerate prosperity.
… scoping Scotland…
Our blueprint for FinTech success is being exported to other parts of the UK. In 2016, we were asked by economic development agency Scottish Enterprise to explore whether the country could become an international FinTech hub. This led to a FinTech strategy for Scotland, which fueled desires for an independent, not-for-profit organisation to lead the way.
In June 2017, we produced a business plan for the new entity and, just over six months later, FinTech Scotland opened for business. In May, we became its exclusive professional services provider , with Kent Mackenzie, our Global Leader for Risk Advisory in FinTech and RegTech, appointed to the board. Already, we’ve helped Scotland break into the Global FinTech Hub Federation rankings, achieving 17th place out of 45. The ambition is to reach the top five.
“Working with cities and regions to create ecosystems is incredibly exciting. Not only can we help to develop a lasting legacy in a region, we can be at the centre of supporting stakeholders in a range of areas. As advisers, it’s our job to gel the community and act as a platform for growth.”
… moving into the Middle East
Our work in the UK has also opened doors in countries not typically known for their FinTech credentials. The Kingdom of Saudi Arabia (KSA) is one exciting example.
KSA’s Vision 2030 includes plans to reduce its dependence on oil, turn financial services into the region’s primary market and encourage a cashless, digital economy.
In March, Deloitte Middle East was appointed as the professional services provider for the Saudi Arabian Monetary Authority (SAMA) and a joint team from the UK and Middle East won a strategic partnership to develop a new FinTech ecosystem and launch FinTech Saudi.
An international hub could rival those already flourishing in Bahrain, Abu Dhabi and Dubai. “We are very excited for the launch of Fintech Saudi, which will be an important catalyst in the development of a thriving FinTech industry in the Kingdom and the region,” comments Ziad Al-Yousef, SAMA’s Director General of Payment Systems.