UK FinTech State of the Nation

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The FinTech State of the Nation is a comprehensive summary of the UK’s FinTech industry to help inform stakeholders for trade and investment and demonstrate the UK’s attractiveness as a FinTech destination.
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UK FinTech 
State of the Nation 
About Department for International Trade (DIT) 
DIT secure UK and global prosperity by promoting and financing international trade and investment, and 
championing free trade.
We are an international economic department, responsible for:
 bringing together policy, promotion and financial expertise to break down barriers to trade and investment, and help 
businesses succeed
 delivering a new trade policy framework for the UK as we leave the EU
 promoting British trade and investment across the world
 building the global appetite for British goods and services
About HM Treasury (HMT) 
HM Treasury is the government's economic and finance ministry, maintaining control over public spending, setting the 
direction of the UK's economic policy and working to achieve strong and sustainable economic growth.
Responsibilities include:
 public spending: including departmental spending, public sector pay and pension, annually managed expenditure (AME) 
and welfare policy, and capital investment
  financial services policy: including banking and financial services regulation, financial stability, and ensuring 
competitiveness in the City
 strategic oversight of the UK tax system: including direct, indirect, business, property, personal tax, and corporation tax
  the delivery of infrastructure projects across the public sector and facilitating private sector investment into 
UK infrastructure
 ensuring the economy is growing sustainably
About Innovate Finance 
Innovate Finance is an independent membership association that represents the UK's global FinTech community. 
More than 250 global members have joined the Innovate Finance ecosystem to date. These companies range from 
seed stage startups to global financial institutions and professional services firms. All benefit from Innovate Finance's 
leading position as a single point of access to promote enabling policy and regulation, talent development, and business 
opportunity and investment capital. 
About the 
document and 
acknowledgments 
The FinTech State of the Nation is a comprehensive summary of the UK's FinTech industry to 
help inform stakeholders for trade and investment and demonstrate the UK's attractiveness as a 
FinTech destination.
The brochure convenes knowledge and perspectives from industry leaders across the domestic 
FinTech ecosystem. This collection of expert views broadly covers the UK's past successes, 
current state, and future objectives in key areas that include: demand, capital, regulation and 
policy, and talent.
The editors are thankful to all contributors to this document. The time dedicated to sharing their 
knowledge and experience of the sector is of huge value to the UK and the FinTech community.
Chief Editors:
Tomas Helm   
Head of FinTech at the Department for International Trade
Alex Low  
FinTech Specialist at the Department for International Trade
Joshua Townson  
Policy and Membership at Innovate Finance
3
UK FinTech State of the Nation
Preface
The Rt Hon Liam Fox MP 
Secretary of State for International Trade and 
President of the Board of Trade
UK FinTech State of the Nation
4
The positive impact 
of technology on the 
financial services 
sector in the 
United Kingdom is 
unprecedented globally. 
Technology has the power to increase transparency and efficiency, 
reduce cost, and give the most vulnerable access to financial 
services. Society and businesses both stand to gain from these 
changes, as incumbents are challenged by the new wave of 
digital innovation.
The UK has long been at the forefront of financial services. However, 
in more recent times, the sector's positive response to the fourth 
industrial revolution has truly set us apart. The perfect storm 
caused by growing technology demand, right touch regulation, 
and customer empowerment in financial services, coupled with the 
sectors response to the financial crisis, has fuelled FinTech's rapid 
growth in the UK and its expansion globally.
The UK is the leading global FinTech hub with a thriving ecosystem 
and international talent pool spanning the whole country. With an 
increasing number of FinTech firms exporting globally from the UK, 
we are continuing to set the global standard on the application of 
technology, and more broadly, innovation in financial services.  
Using key stakeholders from across the UK's FinTech ecosystem, 
this document tells us the story of how the UK's FinTech sector has 
emerged as the global leader it is today, and why this will continue in 
the future.
5
UK FinTech State of the Nation
Foreword
The Rt Hon John Glen MP 
Economic Secretary to the Treasury 
I am proud that the UK 
has been recognised 
as the best place in 
the world to start and 
grow a FinTech firm, 
and I am committed 
to ensuring that this 
remains the case. 
6
UK FinTech State of the Nation
The foundation of our success lies in our leading international financial 
services sector, combined with a strong consumer appetite for innovative 
products and services and a regulatory environment that leads the world 
in the support it provides for innovation. So, it is no surprise the UK is a 
leading global FinTech hub, and one that promises to go from strength to 
strength in the coming years. 
As the FinTech sector matures, on the back of an increasing demand for 
technology in financial services, the importance of the sector in sustaining 
growth will increase further. The UK government recognises the positive 
impact that FinTech has had on financial services, making it easier, cheaper 
and faster for consumers and businesses to access products that better 
meet their needs.  FinTech also addresses the needs of underserved 
markets, including the financially excluded, and it helps to tie together an 
increasingly interconnected world, promoting trade and global growth. 
This document describes the actions that the government, regulators and 
industry have taken to stimulate and sustain the growth of our FinTech 
Sector.  I hope you'll agree with me that all of this creates a compelling 
rationale for entrepreneurs to set up their next FinTech venture in the 
UK and for investors to choose a UK-based FinTech firm for their next 
major investment.
7
UK FinTech State of the Nation
Contents
8
UK FinTech State of the Nation
PREFACE 
4
FOREWORD 
6
AN OVERVIEW OF THE UK FINTECH SECTOR 
10
THE UK AS A TECH CENTRE OF EXCELLENCE 
15
REGIONAL ANALYSIS - FINTECH ACROSS THE UK 
17
THE UK'S INVESTMENT ENVIRONMENT 
23
FINTECH INVESTMENT IN THE UK 
25
A VIEW FROM THE REGULATOR 
28
REGULATION: THE BUSINESS PERSPECTIVE 
30
FINTECH TALENT & SKILLS 
33
THE POWER OF DIVERSITY IN FINTECH 
35
FUTURE TECHNOLOGY TRENDS 
38
PARTNERSHIPS, CULTURE & INNOVATION:  
42 
THE KEY TO FUTURE SUCCESS
MAKING THE UK THE BEST PLACE IN THE WORLD  
45 
TO START AND GROW A FINTECH BUSINESS
MAKING UK FINTECH MORE COMPETITIVE GLOBALLY 
48
KEY MILESTONES 
50
CLOSING REMARKS 
52
CONTRIBUTORS 
54
9
UK FinTech State of the Nation
An Overview 
of the UK 
FinTech sector
UK FinTech State of the Nation
10
Innovation in finance has marked a new way of providing 
consumers and businesses with the technological tools 
they require to widen their access to new products 
and services - today we call this FinTech, the future 
of finance, but it is as much about the 'Tech' as it is 
the 'Fin'.
FinTech has driven significant and wide-reaching 
innovation throughout the UK's finance industry. 
From the latest innovations in insurance to more 
available products in the crypto-asset space. Or, from 
the increased availability of open banking platforms to 
the use of artificial intelligence across the industry, we 
are seeing how the FinTech sector plays a significant role 
in encouraging innovative change across our economy. 
Disruption from FinTech continues to drive change, 
innovation and inclusion at both a local and global level.
The organic growth of the tech sector, especially around 
what became known as "Silicon Roundabout" in the 
2000s and subsequently endorsed by the government 
in 2011 as "Tech City", has had far reaching implications 
for more established sectors of the economy such as 
finance.  Coupled with the rise of the digital economy, 
increased consumer appetite for digital services and the 
fall out of the 2008 financial crash that saw a growing 
mistrust towards traditional financial service providers, 
the environment was fertile for a technology-driven 
disruption of more traditional sectors of the economy.
The UK is a global FinTech leader, building on the 
commanding role London holds as a financial services 
hub. Investors put more money into UK FinTech than any 
other European country in 2018. The UK's deep pools of 
entrepreneurial and tech talent, progressive regulators 
and policy makers, capital and professional expertise, and 
its vibrant startups are driving the digital economy.
FinTech thrives where capital, tech and talent connect 
with regulators and government. The Financial Conduct 
Authority (FCA) is a key influence in setting standards of 
regulation globally. The UK government's current FinTech 
Sector Strategy aims to maintain the UK as the best place 
to start and grow a FinTech business - through supporting 
competition and removing barriers to entry and growth.
This State of the Nation is a strong reference point for 
UK FinTech with contributions from a number of key 
stakeholders and strategic partners, all of whom have a 
deep understanding of the UK FinTech sector. Innovate 
Finance is grateful to the Department for International 
Trade and all the contributors for making this document 
possible and we hope it provides the reader with a clear 
vision as to why the UK will continue to be the global hub 
for FinTech in 2019 and beyond.
Charlotte Crosswell  CEO at Innovate Finance 
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UK FinTech State of the Nation
UK FinTech overview 
+1600
FinTech firms in the UK, 
estimates suggest this will more 
than double by 2030
42%
UK's FinTech adoption rate. 
Global average is 33%
82%
of incumbents expect to increase 
FinTech partnerships in the next 
three to five years 
UK FinTech State of the Nation
12
89,000
finance and insurance firms  
in the UK
$3.3bn
of VC, PE and CVC investments 
into UK FinTech in 2018
42%
of workers in UK FinTech  
are from overseas
56%
of traditional financial 
institutions have put disruption 
at the heart of their strategy
64,000
London has the world's highest 
concentration of  financial and 
professional service firms
76,500
people work in FinTech UK-wide, 
this number is set to grow to 
105,500 by 2030
13
UK FinTech State of the Nation
Technology demand
UK FinTech State of the Nation
14
" The UK has emerged as the dominant force of 
technology-driven innovation. Together with the right 
regulation, policies and business environment, it has 
enabled Worldpay to grow from a UK start-up into 
a global market leader in FinTech worth over $35bn. 
FinTech has never been this exciting and by continuing 
to partner with the government, it will lead the way 
in creating global opportunities for UK consumers 
and businesses."
Ron Kalifa, OBE - Executive Director & Board Member at Worldpay 
The UK as a Tech  
Centre of Excellence 
" TRAction opened its first international 
office in London as there is strong 
demand for technology from financial 
firms to assist them with meeting 
regulatory requirements.  Following 
our successful launch in Australia, we 
found that many of our clients had head 
offices or subsidiaries in the UK and 
Europe which we could leverage our 
connections to build up a client base."
 Quinn Perrott  Owner at TRAction
Over the last year, the performance of the UK digital 
tech sector has been world-leading, with British firms 
attracting more capital than any other European country. 
Our great strength in technology and innovation, built 
on the UK's excellence in R&D and creative thinking, is 
demonstrated by the breadth of tech activity right across 
the country, and the powerful networks being forged by 
the next generation of entrepreneurs.
The tech sector has experienced rapid growth over recent 
years, both across the UK and beyond. At each stage of 
growth, ecosystems experience shared challenges and 
find shared strengths. But each ecosystem has qualities 
unique to its location and culture.
The digital tech industry is powering the growth of 
local economies across the UK. However, it is not the 
sole preserve of larger metropolitan cities. Areas such 
as Guildford, Aldershot, Slough and Heathrow have 
significantly higher digital tech density and the highest 
levels of employment and tech turnover, suggesting 
that the UK has emerging digital suburbs. The value of 
domestic networks must not be underestimated. Physical 
proximity often aids collaboration, as evidenced by the 
number of tech clusters around the UK.
Global connections are key to domestic 
success
Digital tech companies in London are the most connected 
in Europe, second only to Silicon Valley for international 
connections. 25% of entrepreneurs across the world 
report having a significant relationship with two or more 
entrepreneurs in London, compared to 33% for Silicon 
Valley. These connections extend the UK's market reach 
and drive innovation in a process that is inherently 
collaborative.
The value of domestic networks must not be underestimated.  
Physical proximity often aids collaboration, as evidenced 
by the number of tech clusters around the UK.
Connectedness  whether local or global  drives 
innovation, and also extends the market reach of all 
players in an ecosystem. Since the success of firms in the 
knowledge-based economy is increasingly dependent on 
their ability to innovate, the importance of these global 
networks to the performance of the UK tech sector cannot 
be overstated.
The UK is a global leader in digital tech 
investment
The UK was in the top three countries for total capital 
invested in digital tech companies from September 2016 
to August 2017, behind only the US and China. Only the 
US has a higher number of deals, suggesting that the UK 
does more small deals than China. This may indicate one 
of three things:
1.  The vibrancy of the nation's startup and scaleup 
landscape;
2. Appetite for risk on behalf of tech investors;
3.  Smaller scale, speculative investments in emerging 
tech, like AI.
Total investment and number of deals in digital 
tech companies have risen significantly since 2012. 
From 984 million in 2012, spread over 870 deals to 
3.3 billion in 2016 over 2645 deals. 
Ambitious tech companies increasingly seek out smart 
capital. This investment comes hand in hand with support 
from people who have experienced the challenges 
of accelerated growth and understand how to help a 
company develop from initial proof of concept to mass-
market growth. International investment acts as a catalyst 
for global connections  bringing together companies 
and investors from across the world. This stimulates 
worldwide network building, which in turn contributes to 
the emergence of ground-breaking global companies.
15
UK FinTech State of the Nation
Tech transformation in financial 
services
Financial services is being disrupted in a number of ways 
by technology. This section explores the impacts of tech 
talent, and emerging tech adoption.
Tech skills are being used across a diverse range of 
sectors aside from technology, including financial 
services, professional services and architecture and 
engineering. Using LinkedIn data from the UK's 23 million 
members showed that 2.2 million people claimed to have 
tech skills in their profile. Tech Nations' research found 
that tech skills are highly transferable  36% of members 
now working in tech moved from non-tech jobs. 7% moved 
from professional services, 5% from financial services and 
insurance and 3% from media and entertainment.
For a long time London has been the European capital 
of finance. In the East of the city, hundreds of financial 
institutions dominate the skyline and the economy. 
However, FinTech is not the exclusive preserve of 
the capital. 
The next largest regions for FinTech are the South East 
and East of England, which surround the capital. When 
broken down, this geographic bias is unsurprising. 
London has always been home to the UK's and Europe's 
most dominant financial services. It is also the centre 
of governance and financial regulation nationally. In 
an industry so dependent on legal rules, being close to 
regulators is invaluable.  
Equally, almost all of the UK's premier FinTech 
accelerators are based in the East End. It is therefore 
unsurprising, that 85% of the accelerators attended by 
UK FinTech firms are in London. These pull factors add 
up, and go some way to explain London's dominance in 
the field.
Yet some firms are blossoming outside the capital. 
Durham-based Atom Bank is revolutionising commercial 
lending. Its customer-centric approach to banking makes 
getting a personal mortgage or loan easier for consumers. 
Even more geographically surprising is Penarth-based 
Wealthify, an investment platform for everyone. Last year 
the company expanded from the  UK having raised 2.14 
million in investment. Initiatives like FinTech North have 
also sprung up to showcase the best FinTech companies 
the Northern Powerhouse has to offer. 
Tech Nation's FinTech programme - 
supporting UK growth
Tech Nation's sector-specific FinTech programme is 
aimed at company founders. In 2018, through a 24 hour 
induction, series of in-depth learning sessions, networking 
events and a three-day international showcase trip, 
founders became part of the very first Tech Nation 
FinTech cohort. 
Last year was an exceptionally strong year for investment 
in the UK FinTech sector as it attracted a record 2 billion 
in VC funding, including many weighty deals, indicating 
a maturing ecosystem. But nearly half of the UK's high-
growth FinTech firms are still at seed stage, and we need 
to feed the pipeline. This is why Tech Nation has decided to 
target this programme at 'bridge-stage' startups.
Gerard Grech  CEO at Tech Nation
16
UK FinTech State of the Nation
Regional Analysis - 
FinTech across the UK 
The UK is the undisputed FinTech 
capital of the world. This position 
has been built on 3 key factors: the 
strength of the UK in financial services, 
the nature of UK consumers and the 
UK regulatory environment.
 
FinTech businesses in the UK benefit from its skills in 
financial services, its network of supporting service 
businesses, and its draw as a place for international 
investment and capital raising. These factors have turned 
the UK into an incredibly attractive place for innovative 
businesses like Zopa to grow.
UK consumers are also some of the most digitally savvy 
in the world, sitting behind only the US in terms of their 
uptake of digital commerce. UK customers, in general, are 
very open to trying new and innovative financial services 
products and services that take advantage of new 
consumer technologies.
The UK benefits from a unique combination of one of 
the most advanced and robust regulatory regimes in the 
world, but one that is also very supportive of innovation 
in financial services, fostering competition in the sector 
and providing consumers with more choice. Zopa has 
benefited from this approach - through both the FCA's 
bespoke peer-to-peer lending regulations, and the PRA's 
new bank startup unit. The FCA's regulatory sandbox  the 
concept of which I worked closely with the regulator on in 
the Blackett Review on FinTech, commissioned by George 
Osborne  has become a blueprint for fostering innovation 
around the world."
Giles Andrews OBE  Co-Founder & Director at Zopa
17
UK FinTech State of the Nation
England:
FinTech clusters developing across England have created 
real value for people, firms and local communities. Local 
Enterprise Partnerships (LEPs) and partnerships between 
leading firms, local government and higher education 
institutions are driving growth across the Southeast 
and beyond. 
In the East, the Financial Industry Group (FIG) in Norwich 
is one such partnership tasked with developing a 
supportive ecosystem recognised internationally as a 
centre of excellence of FinTech. The support and proximity 
to leading global universities and established tech centres 
like Cambridge and Oxford will undoubtedly drive further 
growth in this already well-established region.
Further afield, the Midlands is one of the largest UK 
regions for business, professional and financial services 
outside of London and for tech companies servicing their 
requirements. The strength in Birmingham's Business, 
professional and financial services sector can be seen 
on its skyline. The FinTech cluster is seeing significant 
growth, with a 20% increase in the number of companies 
 driven by cyber security firms in particular  since 
2010. Birmingham is emerging as a global BPFS hub, 
with firms such as HSBC, KPMG, PwC and Deutsche Bank 
expanding their presence locally. Other major cities 
where professional and financial services / FinTech are 
prominent include Nottingham, Leicester, Coventry 
and Stoke.  To the West, the Bristol area is also developing 
fast and FinTech West has recently been formed to help 
build the community in this region, which has close 
proximity to the South Wales corridor.
We need to recognise that the strength of the industry 
in the capital and in other areas across the South such 
as Cambridge, has been vital to establishing the UK's 
leadership position in FinTech and the strength of the 
UK FinTech brand internationally. However, it is also 
right that we ensure that all parts of the country benefit 
from the growth of the FinTech sector, both in terms of 
the economic growth derived from businesses building 
FinTech products and services, and the benefits that 
FinTech delivers to financial services customers through 
better products and services. 
Myself and my fellow envoys are focused on how to make 
this a reality. For me that's about levelling the playing 
field and ensuring that a FinTech's ability to succeed is 
dictated by the strength of its business proposition and 
not by geography.
David Duffy - Regional FinTech Envoy for England & 
CEO at CYBG
Northern Powerhouse:  
"It's great up North. Atom chose Durham 
as its home and headquarters.  With 
excellent transport links, a growing 
digital economy, talented and ambitious 
people and proximity to prestigious local 
universities, it's been a great place to 
build our business." 
Mark Mullen  CEO at Atom Bank
According to World Bank data, the North of England 
(Northern Powerhouse) would be the 9th biggest country 
in Europe by financial services Gross Value Added (GVA), 
making it larger than 30 other countries. The region 
employs 11 times as many people in financial services as 
Frankfurt, and twice as many as Paris. Although there 
are no official statistics, the Northern Powerhouse is 
also likely to be the largest FinTech community in the UK 
outside London.
Leeds and Manchester are widely acknowledged as being 
the main FinTech hubs in the region, although Liverpool 
and Newcastle have established financial services and 
digital scenes and there is also an increasing amount of 
activity in other locations. The FinTech community in 
the north is mainly made up of established businesses 
seeking to embrace FinTech, rather than startups looking 
to drive disruptive change. The evolving FinTech sector is 
receiving an increasing amount of support from the major 
universities across the north, including the launch of 
FinTech courses, the creation of physical innovation hubs, 
and a number of initiatives to encourage academics and 
businesses to work together on innovation and FinTech 
related challenges.
Manchester has strengths in banking, insurance, 
payments, platforms and data analytics, with major 
brands having a presence in the region including Coop 
Bank, Barclays, BNY Mellon, HSBC, and RBS. Leeds has 
a large diverse base of financial services and technology 
organisations and is host to 30 national and international 
banks, including the likes of First Direct, CYBG, and HSBC, 
home to 3 of the top 5 building societies and is the only UK 
city outside of London to be home to offices of the three 
main credit referencing agencies  Experian, Equifax and 
TransUnion. Liverpool is the largest wealth management 
centre outside London, and home to major international 
financial brands, including Santander, Barclays, Investec 
and Pershing BNY Mellon. Newcastle is home to a number 
of major brands including Sage, Virgin Money (now CYBG), 
and Tesco Bank, and has a thriving digital scene.
18
UK FinTech State of the Nation
The FinTech landscape in the north is forming not just in 
individual cities, but across the region, with events-based 
community FinTech North playing a central role. Founded 
in Leeds in 2016, it has now expanded into a series of 
conferences and events across locations including 
Leeds, Manchester, Liverpool, Newcastle, Harrogate, 
and Sheffield. FinTech North has hosted over 35 events 
attracting over 4000 delegate registrations from over 
600 different companies, with speakers drawn from 
21 countries.
From an inward investment point of view the regions 
benefit from a coherent message, mapping their 
specialisms with international FinTechs to help create 
a compelling message. When multiple cities combine 
their strengths, as we are starting to see in the North of 
England, this can be extremely powerful. 
Chris Sier  FinTech Envoy for Northern Powerhouse & 
Chairman FinTech North
Julian Wells  Director at Whitecap Consulting & 
FinTech North
19
UK FinTech State of the Nation
Wales:
" The decision to establish our HQ in 
Wales was based on a variety of factors: 
strong pipeline of talent from local 
universities, emerging innovation 
clusters, generous Welsh government 
incentives and new SME accelerators." 
Chris Ganje - CEO at Amplyfi 
There is a nascent FinTech ecosystem in Wales, primarily 
centred around the South Wales corridor of Cardiff, 
Swansea & Newport. There are a multitude of tech hubs, 
around 40 FinTech firms, a dozen corporate financial 
services firms headquartered in Wales and perhaps 20 
other significant financial services and FinTech firms who 
have opened a key function in Wales.
Wales already has a plurality of successful financial 
services and FinTech companies particularly in the areas 
of insurance, price comparison, payments and lending 
with some successes in the areas of banking, investment 
management and RegTech.
Wales has good culture, talent and skills, low operating 
costs, great work life balance, low property and operating 
costs, a burgeoning academic sector and easy access to 
London. Wales is a proud nation and has a strong sense of 
community where even the corporate financial services 
firms are keen to participate to help the FinTech startups. 
There is good networking and a programme of associated 
networking events and groups. Funding is readily available 
although firms tend to have to travel to find it rather 
than having investors knocking on their door, as happens 
in London.
In order to further enhance the ecosystem, the HM 
Treasury appointed FinTech Envoy for Wales is working 
closely with Welsh government to establish a new not-for-
profit organisation called FinTech Wales. FinTech Wales 
will be run by a broad board of experienced FinTech and 
financial services leaders together with public sectors 
stakeholders and leaders from other firms that serve the 
needs of the industry. The board aims to establish a clear 
vision for FinTech Wales during the first half of 2019 and 
establish a programme of activities to enhance the Welsh 
FinTech Ecosystem which enables Wales to be identified as 
a go-to location for FinTech and enable anyone wanting to 
start a FinTech company to have the best possible chance 
of success.
Richard Theo  FinTech Envoy for Wales & Co-Founder & 
CEO of Wealthify
Northern Ireland:
" We looked at many potential locations 
and Belfast was the outstanding 
choice. The combination of a highly 
educated workforce, attractive business 
environment and great infrastructure, 
underpinned by the support of local 
government and Invest Northern 
Ireland, offers a compelling proposition 
for a global financial services group 
such as ours." 
Luke Barnett - Group CIO at Tullett Prebon 
Northern Ireland is a leading international centre for 
financial technology and Belfast is the world's number 
one destination for FinTech development projects. Major 
international banks, insurers and FinTech companies in 
the region include Citi, Lloyds, Allstate, Liberty Mutual, 
Visa, Cayan and Chicago Mercantile Exchange. 
International companies benefit from the strength of 
technology and innovation talent in the region, but they 
have similarly tapped into the wealth of other skills to 
deliver a broad range of services to clients including 
fund administration, operations, fraud prevention, risk 
management, compliance and legal services.
Northern Ireland has a thriving start up and SME FinTech 
community thanks to a highly developed entrepreneurial 
ecosystem, vibrant networking scene and the active 
promotion of sector collaboration. FinTech incubators 
established in the region by Danske and Barclays 
are nurturing entrepreneurs in payments, InsurTech 
and RegTech.
Northern Ireland has a high concentration of product 
development activity in which NI tech companies and 
teams 'own' product management, design, development, 
QA and DevOps from end to end. Consequently it has 
become a major international hub for trading technology, 
data analytics, cyber security, and regulatory solutions.
Alastair Hamilton - CEO at Invest Northern Ireland
Kerry Quinn  Client Executive for Financial 
Professional Services at Invest Northern Ireland   
20
UK FinTech State of the Nation
Scotland: 
" When you cluster together people 
working at the cutting edge 
of data science with leaders in 
financial services, it creates a 
unique environment of innovation, 
collaboration and ideas sharing. That's 
one of the big draws for us in Scotland, 
where you have some of the world's best 
academic institutions and innovation 
hubs for globally leading financial 
institutions sharing space together." 
Paul Christensen  CEO & Co-Founder at Previse
Scotland is a global FinTech centre building on its 
reputation as an international financial location with 
Edinburgh being the second financial centre in the 
UK after London. Today, talented people, innovative 
entrepreneurs, an established financial services sector, 
a supportive business environment, world leading 
universities and a vibrant tech scene are rapidly growing 
Scotland as one of the top FinTech destinations in the 
world as well as being voted one of the top places to live in.
Scotland is now home to over 100 FinTech companies and 
the country has been voted the best European place to 
start a tech business. Scottish FinTech firms are tackling 
societal and economical challenges with innovative 
solutions and technologies. Growth in the Scottish FinTech 
sector is very strong and the number of innovative 
FinTech SMEs based in Scotland has grown by three times 
in twelve months from 2018. 
This growth has been driven by new startups, existing 
international FinTech firms setting up in Scotland to 
expand and early stage technology firms expanding their 
proposition into financial services. This is supported by 
many of the world's most respected financial institutions 
having functions in Scotland, and the growth in Scottish 
financial services having recently outstripped London.
There are significant opportunities for FinTech firms to 
grow through collaboration in Scotland with the financial 
sector as demonstrated by FNZ with Standard Aberdeen 
Life and FreeAgent with RBS.
In addition, entrepreneurs and companies relocating to 
Scotland can benefit from an unparalleled level of support 
from dedicated public sector agencies such as Scottish 
Development International (SDI). Scotland's universities 
were the first to offer specific degree courses in FinTech. 
To help Scotland further build on its FinTech credentials, 
FinTech Scotland was established in 2018 by members 
of Scottish Financial Enterprise (SFE), University of 
Edinburgh and Scottish government. FinTech Scotland 
acts as a strategic enabler ensuring the sector achieves 
critical mass through innovation, collaboration and 
inclusion as part of the country's broader digital and data 
economy objectives.
FinTech Scotland works closely with SFE, the respected 
body representing all financial institutions in Scotland 
as well as the international FinTech body FDATA in 
establishing a global open finance centre of excellence.
David Ferguson  FinTech Envoy for Scotland & CEO 
at Nucleus
Louise Smith  FinTech Envoy for Scotland & Head of 
Intelligent Automation at RBS
Stephen Ingledew  CEO at FinTech Scotland
21
UK FinTech State of the Nation
Capital & Investment
" The UK has always been a nation 
of inventors, of imagineers and of 
entrepreneurs. The UK's exceptional 
R&D incentive schemes ensure that 
firms that invest in change are rewarded 
to continue investing in their future. 
Encouraging further investment into 
financial services innovation by the UK's 
89,000 finance and insurance firms 
will be instrumental in helping the UK 
remain one of the world's most innovative 
economies. Today we are the world's 
FinTech capital, and continuing to utilise 
these initiatives and working with our 
government will be a critical component 
to ensuring we maintain this position."
Adam Kene - Founder & CEO at Kene Partners 
UK FinTech State of the Nation
22
The UK's Investment 
Environment
" At Oval Money we believe in creating 
a product that is European at heart 
and thus even though we are Italian 
founders, we chose the UK to be the 
headquarters. The UK and especially 
London is still the largest hub for 
startups with real incentives to be here 
like tax benefits for startups, equity 
investors through crowdfunding, R&D 
tax reliefs and a great ecosystem of very 
diverse talent from all over the World"
Benedetta Arese Lucini  Co-Founder & CEO  
at Oval Money
The UK is the home of European enterprise and 
investment. We have the most mature and highly-
developed funding eco-system in Europe, connecting 
entrepreneurs and investors along an innovation chain 
which is supported by strong government backing, world 
renowned scientific and academic institutions, and a 
rich support infrastructure. From business angels and 
crowdfunding, to venture capital and the public markets, 
the UK is the best and most logical place in Europe to 
start, run and grow a business.
Similarly, if you are an investor, there is no better place 
in Europe to find exciting, cutting-edge companies that 
are not only creating great things, but which have a 
commercial potential as well. 
Consider the facts: we have a highly-educated workforce 
with 4 out of the top 10 universities in the world.  In 2018, 
more than 660,000 new business were created . Foreign 
Direct Investment reached 1,336.5 billion in 2017 in 
the UK according to the Office for National Statistics , 
making us the destination of choice for European inward 
investment projects, which reached 1,205 projects that 
same year.  Of the 33 billion raised by UK private equity 
and venture capital funds in 2017, over 80% of that came 
from outside the country (in fact, the UK is the second 
biggest global hub for private equity and venture capital 
after the US). 
Key to all of this is our long and proud track record of 
enterprise, entrepreneurialism and innovation. And 
nowhere is this more obvious than in the tech sector. 
Much of this success is facilitated by a raft of government 
initiatives and funding initiatives. Tax-advantaged venture 
capital schemes such as the Seed Enterprise Investment 
Schemes (SEIS), Enterprise Investment Schemes (EIS) and 
Venture Capital Trusts (VCTs) have all raised significant 
sums from retail investors and have played an important 
role in providing a continuum of early stage funding 
for companies. 
They provide important development funding to build the 
generation of growth companies that are moving into the 
next phase of larger scale up capital. 
The government has also announced measures to unlock 
over 20 billion of investment of 10 years through the 
British Business Bank (BBB); a government-owned business 
development bank supporting economic growth by making 
finance markets work better for smaller businesses. 
In June 2018 the BBB announced the launch of British 
Patient Capital (BPC), a 2.5 billion investment vehicle to 
help innovative UK startups become world-class leaders 
through long-term investment by investing in venture 
and growth capital funds. By investing alongside with the 
private sector, British Patient Capital will support 7.5bn of 
investment for British businesses. 
Alongside this, the BBB started a 500 million 'Managed 
Funds Programme' designed to increase access to 
longer-term venture and growth capital for ambitious and 
innovative, high potential companies in the UK. As part 
of the government's response to recommendations set 
out in the Patient Capital Review, the new programme will 
invest commercially in large-scale fund-of-funds, run by 
experienced managers, to boost the amount of patient 
capital available to the UK's high-growth businesses.
Startups need more than capital to support their growth, 
of course, and one of the most effective ways of providing 
this is through accelerators and incubators, programmes 
designed for young businesses and offering them a range 
of services such as legal advice, finance investments 
access to professional networks, mentoring and sometimes 
even office space or funding. The latest estimates put the 
number of accelerators operating in the UK at 186 and 
the number of incubators at 205 . These programmes are 
hugely beneficial. According to new research, the average 
accelerated company raises 44% more funding and 
achieves a 75% higher valuation than those that do not .
Their success and popularity are a clear indicator of this 
country's entrepreneurial appetite. We are producing 
outstanding companies across a wide range of sectors, 
some of which, like FinTech, barely existed a decade 
ago. We have a proud history of innovation, and the 
infrastructure and expertise to flourish in the years to 
come. No matter where you go, you will find people and 
companies doing extraordinary things, pushing the 
boundaries of what is possible. It is these companies 
which illustrate just how important a combination of 
ideas, business expertise and investment is to fostering 
enterprise. Whether it is our world-leading academic 
institutions, our ability to create and attract talent from 
across the globe, our huge funding eco-system or, perhaps 
more fundamentally, our entrepreneurial culture, the UK 
truly is the innovation nation.
Tim Hames  Director General at British Private Equity 
& Venture Capital Association (BVCA)
Tom Allchorne  Director at British Private Equity & 
Venture Capital Association (BVCA)
23
UK FinTech State of the Nation
Key Government Funding Initiatives 
Seed Enterprise 
Investment Scheme 
(SEIS)
Your company (or group of companies if you're a parent company) may 
qualify if it is less than 2 years old, and at the time of investment has:
 no more than 200,000 in gross assets
 fewer than 25 employees
 not previously carried out a different trade
You will not qualify if you've already had investment through EIS or a VCT.
Enterprise Investment 
Scheme (EIS)
Your company (or group of companies if you're a parent company) may 
qualify if at the time of investment it has:
 no more than 15 million in gross assets
 fewer than 250 employees
 been more than 7 years since it's first commercial sale
There may be higher limits if your company carries out research, 
development or innovation and meets certain conditions.
Social Investment Tax 
Relief (SITR)
Your social enterprise must be either a:
 registered charity
 community interest company
 community benefit society
Your social enterprise may qualify if you have:
 no more than 15 million in gross assets
 fewer than 250 employees
Venture Capital Trust 
(VCT)
A VCT is a company that has been approved by HMRC and invests in, or 
lends money to, unlisted companies.
A VCT may invest in your company if it has:
 no more than 15 million in gross assets
 fewer than 250 employees
 not been more than 7 years since its first commercial sale
There may be higher limits if your company carries out research, 
development or innovation and meets certain conditions.
 
Source: Gov.uk - Guidance: use a venture capital to raise money for your company 2016 - updated on 5th September 2018 & Gov.uk  Guidance: 
use SITR to raise money for your social enterprise  updated on 25 January 2019
24
UK FinTech State of the Nation
FinTech Investment  
in the UK  
The UK has established itself as a leading global FinTech 
hub following a banner year for investment activity 
across the entire FinTech lifecycle from seed capital 
through to billion dollar mergers and acquisitions 
("M&A"). Investment activity, including Venture Capital 
("VC"), Private Equity ("PE") and Corporate VC ("CVC") 
investment as well as M&A soared to US$ 20.7bn (2017 
US$5.6bn): more than half of the US$37.5bn recorded 
across Europe and representing over 20% of the global 
activity of $111bn.
UK FinTech Investment Activity
Sources: Innovate Finance UK FinTech VC Investment Sector Analysis 
12 February 2019 & KPMG Pulse of FinTech 2018 H2, 13 February 2019, 
Data provided by Pitchbook
FinTech funding remained strong with US$3.3bn of VC, PE 
and CVC investments in 2018, over 68% of the US$4.8bn 
recorded across Europe. Growth of these investor classes 
has increased on average of 55% per annum since 2014, 
but 2018 saw the UK's share of VC, CVC and PE funding 
drop from 14% of global investment to 8.3%, mostly due 
to Ant Financial's US$14bn funding round in Q2 of 2018 
vastly increasing the overall global investment. M&A 
activity has grown since 2014, showing the increasing 
maturity in the sector as the sector's pioneers begin to 
exit or consolidate, but it is still driven by relatively few 
significant transactions. 
There have been a number of headline investments 
and deals during 2018 across the full spread of VC, PE, 
CVC and M&A transactions. Revolut's US$250m Series 
C funding was in the global top 10 largest VC funding 
rounds in 2018; and of the ten largest European FinTech 
M&A deals in 2018, six of them were in the UK. 2018 also 
saw the first IPO for a UK FinTech: with Funding Circle 
obtaining a 1.5bn valuation and raising 300m at their 
IPO in September 2018, showing the maturing of this 
sector in the UK.
VC and CVC UK FinTech Investment
Source: Pitchbook Data 4 January 2019, KPMG LLP Analysis
 
Specifically, CVC investors are accelerating their 
investment in this space, typified by the US$20m 
investment in Bud from HSBC, Goldman Sachs and 
ANZ Bank, among others. This investor class is now the 
second most active group investing into UK FinTech 
providing around 40%of total VC investment, which is 
a fourfold increase compared to 2015. This is supported 
by a healthy 70% increase in the average deal size in 
2017 and 2018 compared to the earlier part of decade, 
demonstrating a focus on more mature investments by 
this increasingly important class of investor. CVC investors 
also tend to be international: with over 65% of these being 
from overseas, predominately from the United States 
of America.
VC and CVC Average Value per Deal
Sector coverage
A defining feature of the UK FinTech market is the 
depth and breadth of sectors that it covers. Investment 
into challenger banks led the way with US$461m of VC 
investment in 2018: mostly Revolut's Series C funding 
and Monzo's US$110m Series E; but there were also 
high levels of VC investment into several FinTech sub-
sectors, which showed a sharp increase in activity 
from 2017. These included personal finance and wealth 
management (US$333.6m), alternative lending and 
finance (US$306.6m), blockchain and digital currencies 
(US$174.7m), Insurtech (US$103.1m), and payments 
(US$102.5m).
Source: Pitchbook Data at 4 January 2019, Analysis by KPMG LLP  
in the UK 
25
UK FinTech State of the Nation
Building regional hubs
While London is frequently associated with FinTech 
startups and represents 84% of VC, CVC and PE 
investment volume, there is also considerable activity 
outside the Capital. This has received a further boost from 
the government's 21m Tech Nation programme, which 
aims to create a national network of regional tech hubs in 
areas such as Belfast, Birmingham, Cardiff and Edinburgh.
Many of the UK's recent FinTech success stories are 
based in the regions, where some mature FinTechs are 
now also the subject of M&A transactions. In 2018, three 
of Europe's largest deals involved firms based outside of 
London, including the buyouts of Woking-based Fidessa 
Group for US$2.1bn and Datchet-based IRIS Software 
group for US$1.8bn, as well as the US$910m private equity 
investment in Peterborough-based BGL Group. 
International expansion
Maintaining the UK's status as a global FinTech hub as well 
as promoting expansion around the world is also an area 
of focus that has led to successful outcomes. To that end, 
in 2018 the UK released its first FinTech Sector Strategy 
with the aim of helping the UK retain its leadership in the 
FinTech space in Europe. Part of this strategy includes 
appointing six FinTech regional envoys to ensure the 
benefits of FinTech are felt across the UK.
Alongside this, a major aspect of the government's 
support for the FinTech sector in recent years has been 
the establishment of 'FinTech bridges' with jurisdictions 
around the world to help reduce regulatory barriers and 
support international expansion in a post-Brexit world. 
So far, these bridges have been established in Australia, 
China, Hong Kong, Singapore and South Korea. 
Anton Ruddenklau - Global Co-Leader of FinTech  
at KPMG
Joe Cassidy - Head of Market Infrastructure at KPMG  
in the UK
Motive Partners' focus on technology-enabled 
companies that power financial services meant 
the UK was an obvious destination for us to set up 
our European Headquarters, building our 15,000 
square foot Innovation & Investment Centre in 
Canary Wharf. From Thomas Savery's steam 
engine in 1698 to Sir Tim Berners-Lee's World 
Wide Web in 1989, for centuries the UK has been 
a place of imagination and creativity, producing 
some of the most life-changing, pioneering 
solutions in history.  The UK is continuing to 
affirm its place as an innovation capital through 
the climactic evolution of financial services as it 
intersects with technology  there has never been 
a more exciting time to be investing into the UK's 
FinTech ecosystem.
Increasing levels of investment into the UK's 
FinTech industry show that the industry is going 
from strength to strength. The UK remains 
Europe's best destination for FinTech investment 
and the increasing levels of later stage growth 
capital being deployed suggest the industry is 
maturing at an unprecedented rate globally. The 
success of the UK's FinTech sector proves that 
there is no better place to innovate and invest in 
the future of financial services. The UK's diverse 
FinTech talent, connectivity and capability 
combined with the government's commitment to 
ensuring the continued growth of the industry sets 
it apart from other financial services hubs across 
the globe.
Furthermore, we are now seeing increasing levels 
of collaboration between incumbents and new 
entrants within the financial technology space. 
Firms that provide the right combination of capital 
and value-creation capabilities to enhance this 
relationship stand to gain, and will ultimately 
support the next generation of technology-enabled 
financial services in the UK.
Alastair Lukies CBE  Prime Minister's Business 
Council & Founding Partner at Motive Partners
26
UK FinTech State of the Nation
Regulation
27
UK FinTech State of the Nation
" We looked at a number of jurisdictions when we decided to 
expand in Europe. Ultimately, we selected the UK to be our 
European regional headquarters. A clear, structured and 
applicant-friendly UK regulatory environment was one of 
the positive factors." 
Ricardo Capelveere - Founder & CEO at Currenxie
A view from the 
Regulator
"We are humbled to say that without the 
FCA regulatory sandbox we wouldn't 
have been successful. We wouldn't have 
had an opportunity to prove our business 
model in a way that balanced support 
for new innovation and consumer 
protection."
Edward Maslaveckas - Co-Founder & CEO at Bud
Why we care about Innovation
Innovation is more than just a buzz word at the FCA, it's 
something that actively helps us achieve our objectives, 
particularly in promoting effective competition in the 
interest of consumers. It's why we have a dedicated 
Innovation Division at the FCA.
 
Innovate was launched by the FCA in October 2014, 
shortly after receiving our competition mandate. We 
launched our RegTech programme in 2015, after issuing 
a Call For Input to find out more about how we could 
support the adoption and development of RegTech. 
At the heart of Innovate is the understanding that 
regulation designed to fit different products at a different 
point in time can hinder the progress of new technologies 
created for the here and now. In short, a legacy approach 
can produce legacy outcomes. 
Therefore, we decided that we had to create the 
conditions that would allow competition to work as well as 
it could through innovation. 
Our aim through RegTech was to support the development 
of innovative strategies and data-led approaches to 
provide opportunities for us to regulate and supervise 
more efficiently and effectively and overcome regulatory 
challenges in financial services
 
The first steps
When we first launched, we had one service offering - 
Direct Support  a dedicated contact point at the FCA to 
help firms navigate the tricky landscape of regulation. 
 
In 2016, we focused on the UK financial advice market 
and co-wrote a paper with the UK's HM Treasury on the 
provision of financial advice in the UK (the Financial Advice 
Market Review). We found that steps needed to be taken 
to make the provision of advice and guidance to the mass 
market more cost-effective, such as through 'robo' advice.  
To help address the findings we created the Advice Unit 
where we provide tailored feedback for firms involved in 
advice and guidance services. 
Evolving our approach
The Sandbox supports firms that want to test new or 
innovative ideas with real customers in a controlled 
environment. Balancing all our statutory objectives 
(consumer protection, protecting and enhancing market 
integrity, and promoting effective competition in the 
interest of consumers) is very important for us, and this 
'controlled environment' means that firms still need to 
follow the rules before they can test on consumers. It is 
open to authorised firms, firms that need authorised, and 
firms that provide technology services to regulated firms. 
We are looking for products that serve a genuine 
consumer need, that offer a solution to an underserved 
corner of the market or a new approach to a thorny issue. 
It is not a badge of honour, there are no favourites, and 
there are no free passes. We do not favour a particular 
technology, or company, but will support all those that are 
truly innovative and provide a genuine consumer benefit.
Demand for the sandbox continues to be high, and our 
fourth cohort was our largest to date with 69 applications, 
of which 29 went forward to testing. 
We've also focused on specific areas that could benefit 
from innovation and we launched our first sector specific 
support function, the Green FinTech Challenge. 
Through our RegTech programme we have targeted 
specific areas where we have seen opportunity for 
innovation and technology to deliver better outcomes for 
firms, markets, consumers and regulators. Since 2015, 
we have delivered TechSprints focussing on regulatory 
reporting, access and mental health (vulnerable 
consumers programme) and AML/financial crime. 
We have also moved our approach from purely TechSprint-
led to working alongside the BoE and regulated firms 
to develop a shared vision to make the current system 
of regulatory reporting more accurate, efficient and 
consistent. The pilot explores how to make reporting rules 
less reliant on human interpretation and implementation 
and improve the quality of regulatory data.
Feeding back into the organisation 
The RegTech team have developed a series of 
engagement tools to bring external views into the 
organisation and developing industry-wide know-how 
around specific innovations and developments. This 
includes demo days, where we invite anyone with a 
RegTech solution to demo their product to a panel of 
interested parties from across the FCA. We also host 
TechKnows, bringing experts in to bring to life the 
technology that exists and how it could change the 
regulatory landscape in the future. 
The sandbox has also proven to be a very useful tool for 
identifying gaps in policy, or highlighting unnecessary 
barriers to entry and innovation.  This includes areas 
of financial services where there is a lack of regulatory 
clarity which may hinder the adoption and implementation 
of innovative technologies.
28
UK FinTech State of the Nation
One such example is Distributed Ledger Technology 
(DLT) and cryptoassets. This fed into FCA policymaking 
through which we published our position on DLT, in this 
case supporting its use in financial services. We took a 
similar approach to the cloud in 2016, when we became 
the first G7 nation to produce guidance on outsourcing to 
the cloud. 
Our DLT work also helped with our approach to 
cryptoassets which included participating in the 
Cryptoassets Taskforce in 2018. This was part of the wider 
UK government's FinTech Sector Strategy and brought 
together HM Treasury, the FCA and the Bank of England. 
In early 2019 we published 'Guidance on Cryptoassets', 
a consultation document that laid out the regulatory 
treatment of different types of cryptoassets, as well 
as conducting research into consumer behaviour 
around cryptoassets. 
However, it's just a step in our wider cryptoasset work 
as the taskforce has also identified 3 major harms: to 
consumers, to market integrity and the risk of financial 
crime. During 2019 the Taskforce members will each take 
steps to address these harms and to encourage future 
beneficial innovation. 
Expanding our horizons
Very early on, we realised the importance of cross border 
collaboration to innovation  one of the reasons why the 
FCA's Innovate initially proposed the Global Financial 
Innovation Network (GFIN). 
The GFIN seeks to provide a more efficient way for 
innovative firms to interact with regulators, helping them 
navigate between countries as they look to scale. The 
GFIN currently has 29 members, and this list continues 
to grow. It will also create a new global framework for 
co-operation between financial services regulators on 
innovation related topics, sharing different experiences 
and approaches, including the potential for firms to test in 
multiple jurisdictions concurrently. 
Our international collaboration doesn't just occur 
within the GFIN. To deal with new developments that 
are usually cross-border in nature, the Innovate team 
works closely with other regulators and standard setting 
bodies. This includes the FCA chairing the International 
Organisation of Securities Commissions FinTech Network 
steering committee and contributing to a range of 
workstreams, including on big data analytics and artificial 
intelligence. This reflects the importance we attach to this 
work globally.
Our AML TechSprint in May 2018 was the first Global 
TechSprint and convened firms and regulators from 
across the globe. Our follow-up TechSprint in July 2019, 
will focus specifically on Privacy Technology and again will 
bring a global network of regulators and firms together to 
work on a solution to an issue that affects every human on 
the planet.  
Innovation begins at home
A large part of our focus is on supporting the UK FinTech 
ecosystem. Our own Innovate events in London and 
Edinburgh in January this year attracted over 350 
attendees from approximately 20 countries.
We also work closely with other government departments 
such as the Information Commissioners Office, the Centre 
for Data Ethics and Innovation, and the Competition and 
Markets Authority to discuss areas of common interest 
such as the General Data Protection Regulation (GDPR), or 
to discuss the challenges and opportunities that data rich 
business platforms within the financial services industry 
can bring. 
The academic sector is also significant in the UK and we 
engage and support in many ways relating to education 
and knowledge, including supporting world class research 
projects with the Alan Turing Institute. 
We also proposed the idea of a UK cross-sector regulator's 
sandbox in October 2018. We conducted a 6-month 
feasibility study into how a new cross-sector sandbox, 
involving multiple UK regulators, could be established. 
This is truly pioneering and illustrates how committed 
we are to breaking down regulatory barriers to financial 
innovation in the UK.
RegTech
Our RegTech work initially focussed on our role as catalyst 
for development and adoption on new technologies to 
support compliance.  We use our convening authority 
in the form of TechSprints to bring collaborative 
groups together. 
Supported by our engagement with the FinTech and 
RegTech market we've identified opportunities to utilise 
such technologies ourselves to improve the efficiency 
and effectiveness with which we perform our regulatory 
functions (RegTech for Regulators).  In 2018, the FCA 
hosted our largest TechSprint to date to investigate how 
new technologies and greater international collaboration 
could help to improve the prevention and detection 
of financial crime.  Over three days we facilitated 260 
participants from 105 firms spanning 16 countries  
together with regulators and law enforcement agencies 
from the United States, Europe, Middle East and Asia 
Pacific  who worked in teams to help develop solutions 
to prevent and detect financial crime.  An innovative 
approach to a global problem of epic proportions.  In July 
2019, we will be holding a follow-up TechSprint in London 
to explore the potential for new technologies to enhance 
information sharing across jurisdictions. The week-
long TechSprint will investigate how Privacy Enhancing 
Technologies (PETs) could significantly alter the detection 
and prevention rates.
29
UK FinTech State of the Nation
Earlier this year we started important work with the 
Money and Mental Health Policy Institute to identify how 
we can leverage developments in Artificial Intelligence 
and Data Analytics to support the most vulnerable 
consumers in society. We see well managed technology 
as a force for good and hope that we can act as a catalyst 
to encourage firms to adopt new technologies to support 
vulnerable consumers. 
The future
With the launch of Innovate in 2014 we set out to 
encourage innovation and healthy competition in the 
interests of consumers and we are delighted to have 
helped shape the debate and influence the outcomes we 
are seeing, both domestically and globally. 
But we do not rest on our laurels. We will continue to 
improve our work and collaborate domestically, through 
initiatives such as the cross-sector sandbox, as well 
as internationally through initiatives such as the GFIN 
and our RegTech programmes. It is only through such 
collaboration and self-improvement that we can continue 
to support the benefits of innovation for the FCA, both 
now, and into the future. 
By the Financial Conduct Authority  
Regulation: The 
Business Perspective 
"The UK's Open Banking regime is 
the envy of the European FinTech 
community, with modern technical 
standards under the guidance of 
an ambitious and independent 
implementation body. It's no coincidence 
that many world-leading FinTechs have 
chosen to take their first Open Banking 
steps here." 
Conrad Ford  Founder & CEO at Funding Options
The regulatory response in the UK to FinTech in 
some ways has mirrored the journey of startups and 
incumbents  it has been one of experimentation, 
adaptation and an attempt to align the new world to the 
old. However, the overarching regulatory commitment to 
foster market competition has delivered an environment 
that has supported the UK FinTech success story. 
While UK regulators remain alert to the existing and 
emerging risks associated with technological innovation, 
they recognised early on that failing to get close to 
innovation which benefits consumers and competition in 
financial markets presents even greater risks. The FCA's 
regulatory sandbox was itself a radical innovation, 
designed to get under the skin of industry innovation and 
understand the inherent risks and opportunities. 
So how have firms benefited? Deloitte and Innovate 
Finance's recent research shows that the FCA's sandbox 
has provided tangible benefits to firms - some firms could 
"prove" the performance of the innovative technology 
in a regulated environment; others trialled an entirely 
new business model to provide a regulated activity and 
demonstrated that it could be done with the necessary 
safeguards; incumbents trialled FinTech partnerships to 
assess feasibility and viability; and some others decided 
to fine tune their business models after exit, choosing 
to give up the "regulated activity" element of their 
business model to becoming a pure innovative technology 
infrastructure player. What all of them got in common 
was the rigour and challenge from the regulator around 
risks and controls and the ability to demonstrate that 
technological innovation can deliver consumer and/
or market benefit in an innovative and safe way. The 
regulatory scrutiny of business models in the sandbox and 
results of sandbox testing, helped a number of FinTechs to 
have productive conversations with investors and future 
partners, including incumbents.  
And the FCA has benefitted too. It is instructive to see 
how the FCA's experience gained from the sandbox is 
feeding through to policy. The FCA's recent perimeter 
guidance consultation on cryptoassets draws on a 
30
UK FinTech State of the Nation
number of regulatory sandbox case studies to explain 
how existing regulation would be applied to cryptoassets.  
The sandbox experience has also led the FCA to reflect 
on the fact that technology-based models are global 
rather than national in their reach and ambitions. This 
led the FCA to explore a global initiative  the Global 
Financial Innovation Network. It is an experiment still 
in the making but it has the potential to remove some 
of the cross-border regulatory barriers that firms face. 
As with all complex experiments, the constraining factors 
are many  regulatory cooperation, lack of international 
regulatory harmonisation and creating a seamless testing 
experience. But again, the FCA has demonstrated that 
it is willing to experiment and has tried to facilitate the 
international dialogue to support innovation. 
Being close to innovation has also encouraged the FCA 
to try new technologies in its own supervisory activities. 
This again is invaluable experience which will reveal the 
softer challenges  such as culture and scalability  that 
innovating firms will face. This rounded knowledge will 
help focus attention on some of the wider risks associated 
with driving and implementing technological innovation, 
at scale, in regulated firms. 
In the UK, regulators have shown that regulation can 
be a tool for opening up competition and has acted as 
a leader in a number of FinTech policy areas, with Open 
Banking (OB) being a key example. Introduced in 2016, the 
Competition and Markets Authority (CMA) OB Standard 
required UK banks to design and implement industry-wide 
Application Programme Interfaces (API) communications 
standards. This enabled greater interoperability between 
OB solutions and consumer adoption compared to other 
EU Member States. Third party access to previously closed 
consumer banking data has forced incumbent banks to 
be more competitive and consumer focused. New FinTech 
aggregator apps have flourished focussing on providing 
tailored financial guidance to consumers and forcing 
incumbents to up their game or indeed collaborate with 
these new entrants.  However improvements in both the 
design and implementation of OB APIs are still needed to 
ensure consistent high performance and user experience. 
The thorny question of liability for data breaches also 
remains a sticking point for many incumbent banks. 
These all demonstrate that embracing innovation and 
opening up markets will not be without challenges, and 
will inherently raise the profile of some existing risks and 
introduce new ones in the FS sector. 
In their quest to support innovation the objectives of 
the regulators have not fundamentally changed - UK 
regulators remain clear that innovation and competition 
do not take precedence over financial stability, market 
integrity, and consumer and data protection. As FinTech 
services and products continue to grow, increasingly 
regulators are considering the challenges these 
developments present to their broader mandates. 
One such challenge is mapping the old world to the new 
- assessing the adequacy of the regulatory perimeter 
and/or refitting current regulatory frameworks to take 
account of developments such as crypto-assets, Artificial 
Intelligence (AI), or the steep increase in the use of 
technology third party providers. Both FS and cross-
sector authorities have started taking steps to address 
some of these issues. 
On cryptoassets for example, the FCA's regulatory 
perimeter guidance consultation maps cryptoassets 
to the existing regulatory framework and identifies 
challenges. The FCA have confirmed that security tokens 
are financial instruments and the relevant existing rules 
will apply. This has provided much needed clarity to 
both incumbents and startups. Applying these rules to 
cryptoassets in a technology neutral way is a journey that 
firms will now need to explore and refine and there will be 
winners, as well as those who choose to step away from 
the regulated space.   
Technological innovation is also breaking down the 
traditional "industry" view of regulation. It is encouraging 
to see UK regulators taking steps to address the cross-
sectoral reach of FinTech solutions. For example, 
monitoring the increasing use of customer data within the 
context of technologies such as AI is a priority for both 
FS and data protection authorities. In response the FCA 
and the Information Commissioner's Office (ICO) have 
been strengthening their efforts to cooperate effectively, 
make best use of their combined resources, and ensure 
a coherent supervisory and enforcement approach. It 
will be important to see the practical benefits of this 
stronger relationship as the ICO establishes its own 
regulatory sandbox and develops additional guidance on 
data protection risks arising from Big Data technologies. 
The FCA is also exploring the development of a cross-
sector sandbox. Regulation may also need to engage with 
potential utility solutions such as KYC platforms which 
new technologies can enable.
The UK remains a recognised leader for its supportive 
regulatory approach to innovation and we expect that to 
continue. UK regulators can build on their early success 
to meet the growing challenges that will inevitably arise 
as the FinTech market continues to develop. However, in 
many respects the industry as a whole is in unchartered 
territory. UK regulators, similar to incumbents, cannot 
abandon overnight the core foundations on which 
business has been operating and the overarching 
responsibility to the market and consumers. Equally, like 
startups, they cannot forego the spirit of experimentation 
and adaptability that helps them to harness and support 
innovation. The continued success of UK regulators will 
be determined by how well they can balance the best of 
both worlds.  
Louise Brett - Head of FinTech UK and North West 
Europe at Deloitte   
Suchitra Nair - FinTech Lead, EMEA Centre for 
Regulatory Strategy at Deloitte
31
UK FinTech State of the Nation
Talent
UK FinTech State of the Nation
32
" We have a thriving business in Asia Pacific and we needed a base 
in Europe which would match our global ambitions. We chose the 
UK for its blend of world class talent, a friendly and progressive 
regulator and strong client base. The talent pool in particular is 
exceptional, and has meant we have been able to hire the very 
best individuals to help our business continue to grow."  
Jack Zang  Co-Founder & CEO at Airwallex
FinTech  Talent & Skills
The FinTech Ecosystem
Source: EY Financial Services. Ernst & Young LLP. (2016)
The UK is one of the world's leading FinTech hubs and access 
to talent has played a critical role in the success of the UK's 
FinTech sector to date. The UK's traditional strength in both 
financial services and technology has created a compelling 
commercial environment for FinTechs, and has ensured 
access to a large pool of skilled people. 
In the past five years we have seen a host of new FinTech 
firms, business models and consumer propositions enter 
the market, including entrepreneurial start-ups, major 
technology firms, and branchless mobile banking services. 
We have also seen the seeds of the next evolution of financial 
services taking root, including the move towards data 
sharing, open Application Programming Interfaces (APIs), 
biometrics, and the application of artificial intelligence and 
robotics. In delivering this progress, a world-class FinTech 
skills base has been developed in the UK.
The question now, is how can the UK keep up with the 
demand for the skills that will support the future success 
of FinTechs?
 As FinTech adoption increases across the world, we will 
see greater international competition for the best talent. 
Research from the World Economic Forum shows that 
emerging roles  such as, data analysts, AI and machine 
learning specialists, designers, and people who work in 
innovation roles  which currently account for 15% of the 
financial services workforce globally, are expected to 
account for 29% of the workforce by 2022. We are already 
feeling the pressure in the UK market. The UK FinTech 
Census 2017, surveyed approximately 250 companies to 
understand the opportunities and challenges faced by the 
sector. Almost 60% of respondents stated that attracting 
suitable talent was their biggest challenge - a bigger 
challenge than raising equity capital (34%) or driving 
consumer adoption (49%).
We know from our conversations with clients that 
the most important skills for FinTechs are also the 
most difficult to hire - software engineering, systems 
architecture and development, and data analytics.
The good news is that we have already seen the 
government and industry come together to lay some 
important foundations. The Chancellor asked TheCityUK 
to convene a financial services Skills Taskforce, to focus 
on four core areas: digital skills, skills shortages, creating 
greater social, ethnic and gender diversity, and skills 
renewal and retention across the UK. The taskforce will be 
reporting its recommendations at the end of 2019.
33
UK FinTech State of the Nation
In the meantime, we have seen a number of key strategic 
and tactical actions being taken to ensure that FinTechs 
who choose to set up their businesses here are able 
to attract the best candidates from within the UK 
and internationally.
Educational interventions
 The UK has a high density of top ranked postsecondary 
education institutions, with London alone home to four of 
the top 30 ranked universities in the world
 The UK is introducing specific FinTech courses, 
apprenticeships, and sponsored work placements to 
strengthen the FinTech talent pipeline.
 To address the talent shortage in the technology 
sector, the UK government has undertaken specific 
steps towards improving education curricula to align 
more closely with the needs of industry employers, 
promoting STEM (Science, Technology, Engineering, and 
Mathematics) programmes throughout the education 
system.
 We know from our current work with FinTechs that their 
business models do not allow for extensive investment 
in retraining and upskilling people; instead, they rely 
on hiring skilled talent directly into their businesses. 
However, many larger employers in the UK, including 
EY, are offering technical training to upskill their current 
employees as they future-proof their business in the face 
of digital and technological change. FinTechs will benefit 
from the pool of skilled talent this creates.
 We know from our discussions with FinTechs that it is 
hard to access school leavers and graduate hires  they do 
not have the resources to effectively cover the number of 
institutions needed to compete for the best talent. They 
also said it was hard for experienced hires to know where 
to look for FinTech roles. In response, Innovate Finance 
has worked with its members to launch the UK FinTech 
Jobs Board. Launched in April 2019, this will create one 
central platform for the industry to post roles and connect 
with potential candidates.
Incubators and extra-curricular 
activities
 The prominence of FinTech accelerators across major 
UK cities, has played a significant role in attracting and 
retaining progressive start-up talent. 
 In addition, a number of organisations have developed 
FinTech related programs and events in order to attract 
and grow the skills of available talent within the UK 
FinTech ecosystem. 
Government and policy interventions
The UK's success as a global FinTech hub is reflective of 
an encouraging policy environment. Government policy 
makers and regulatory bodies in the UK are working hard 
to create a progressive, open-minded and internationally 
focused regulatory scheme.
 Visas: Schemes that focus on visas for tech talent, such 
as the Tier 1 Exceptional Talent Visa in digital technology. 
These initiatives are welcomed by the industry as they 
provide direct opportunities for foreign technical talent to 
work in the UK. 
Ecosystem Attributes and Benchmark Factors 
EY Financial Services. Ernst & Young LLP. (2016)
34
UK FinTech State of the Nation
 Taxation: The tax system that encourages investment in 
early stage companies, through incentives such as the 
Enterprise Investment Scheme and Entrepreneur's relief.
 Diversity: The gender balance in FinTech in the UK is 
particularly low, with women making up just 29% of the 
employee base of the FinTechs who responded to the 
Census. In the UK, the Women in Finance Charter (WIFC) 
was launched in 2016 to accelerate the path to gender 
equality in financial services and the WIFC is running an 
active campaign to include the FinTech sector.
It's clear from the actions taken to date that, just as the 
UK took the lead on creating a world-class policy and 
regulatory ecosystem in which FinTechs would thrive, the 
UK intends to take the lead in making sure FinTechs can 
continue to attract and retain highly-skilled talent and 
reduce time-to-hire.
Overall, the UK continues to demonstrate great 
competitive strength when attracting talent. The UK 
market remains one of the most attractive in Europe for 
FinTechs, based on EY's analysis of market opportunity. 
This is in no small part due to the ready access to high 
quality financial services talent that FinTechs in the UK 
enjoy. Providing the UK can keep up the momentum, it 
is well placed to remain a globally competitive hub for 
financial services and technology.
Omar Ali  Managing Partner, UK financial services at EY
35
UK FinTech State of the Nation
The Power of Diversity 
in FinTech
" We moved to London in March 2016, 
and definitely one of the main relevant 
aspects of being here for us is the 
incredible pool of diverse talent that is 
part of the ecosystem here. Particularly 
in the FinTech landscape it is quite 
impressive to see how relevant the 
diversity and the level of expertise are to 
the ecosystem, and how much it creates 
a positive circle in which more and more 
talent is attracted to the UK" 
Dlber Lage  CEO at SalaryFits
The world of financial services is changing dramatically 
and it is clear that a combined technology and finance 
industry now drives investment and innovation across 
finance in the UK, providing new platforms for products 
and bringing services closer to the end consumer. 
As FinTech evolves into something more akin to 
mainstream financial services, it is not only driving 
competition, it is also stimulating greater diversity of 
products, and increased financial inclusion. However, as 
with most of our industries, FinTech's success depends as 
much on the people working within it, as it does on those 
external factors - such as regulators or policy makers - 
that have encouraged this growth.  
However, the importance of diversity in both FinTech and 
financial services is no longer an act of simple awareness 
building or garnering high-level buy-in from boards. 
Of course, building awareness remains an essential 
ingredient to change, especially in the corporate world, 
where improvement and advancement seem to move 
at a glacial pace. But the dialogue has shifted and is now 
geared more towards action and ensuring the change 
actually happens.
An Innovate Finance/WPI Economics joint report in 2018 
highlighted the growing importance of FinTech in the UK, 
with the sector set to top 100,000 employees by the year 
2030, with 30,000 new jobs created and an estimated 
3,300 UK FinTech firms. 
Gender diversity statistics in FinTech are not as progressive 
as we would necessarily expect or want them to be. The 
wave of founders that has come out of banking has been 
predominantly male, so unsurprisingly, 83% of all FinTech 
executives are male. Women represent just under a third 
of total staff in the FinTech sector and female founders 
are still struggling to raise capital with unconscious (or 
conscious!) bias against women-led organisations. 
In the UK, only 13% of senior decision makers at venture 
capital firms are women and 48% of firms have no women 
in their investment team. Innovate Finance's 2018 report 
on VC investment showed that of the $1.7 billion that 
flowed into UK FinTech firms, only 3% went to firms with a 
female founder.
Yet there's a great deal of evidence that a diverse 
workforce makes commercial sense. Diversity has a 
proven impact on the bottom line and a direct return on 
investment. McKinsey's latest report on the topic showed 
that in 2017, companies in the top quartile for gender 
diversity on their executive teams were 21% more likely to 
experience above-average profitability than those in the 
bottom quartile. If you throw ethnic & cultural diversity 
into the mix, that number rises to a 35% outperformance.
In FinTech, there is a will for innovation and change that 
is being both demanded and driven by female and male 
entrepreneurs and industry leaders across the sector. 
Innovate Finance wants to play a role in helping to accelerate 
that pace of change, especially in startup FinTechs, who can 
potentially make a real difference right from the very outset.
There is a real need to create better ways of working and 
better systems to deliver a more inclusive sector. There 
is a need for new models to recruit and retain diverse 
talent, new systems to teach and inspire at a young age 
(especially young girls) and more collaboration to develop 
better programmes that deliver real change.
Much better signposting is needed in order to attract more 
people from more diverse backgrounds into FinTech and 
it needs to start at a much earlier age. It has been shown 
that by the age of 10, children already have a strong sense 
of identity of what they can and can't do. So, inspiring 
children from an early age, by providing them with a wide 
variety of role models from diverse backgrounds and skill 
sets, is a vital first step in creating a new model to deliver 
real change in terms of diversity.
Change will only happen through a concerted effort from 
different angles: a top-down approach through inclusive 
and collected leadership; developing and inspiring a pool of 
diverse talent via a bottom-up approach; understanding the 
important role data can play in driving through the change 
by planning, tracking and measuring diversity programmes.
There is a great opportunity, though FinTech, to drive 
through real change. FinTech offers remote working, 
flexibility and the chance to move seamlessly within 
companies to different roles. The culture and social 
purpose of FinTech is naturally attracting a more diverse 
workforce. Could FinTech become the poster child to 
create the next generation of financial services? Can 
financial services learn from the new world? 
Clare Black - Head of Diversity at Innovate Finance
36
UK FinTech State of the Nation
Innovation is driven by the intersection of a myriad 
of voices. The global diversity of voices and 
experiences that meet in the UK provide the perfect 
turf for innovation and material disruption. In fact, 
Neyber's innovative solution to a UK market need 
is a result of a cultural savings experience from our 
founder and CEO.
When we analyse innovation through a data lens, 
the opportunity is also rich. The UK is 4th on the 
Global Innovation Index behind only Switzerland, 
Netherlands and Sweden. 
The UK has one of the most diverse and inclusive 
societies on the planet. We have the ability to attract 
people from all over the world. Global visibility linked 
with our local advantages gives the UK an almost 
unmatched ability to innovate that simply can't be 
replicated anywhere else. 
There are several complementary factors that 
make the UK market hot for innovation. The UK has 
some of the best and well regarded universities in 
the world and centres of research excellence, with a 
world class science and research base.
Additionally, home to leading edge industrial 
sectors, a skilled and productive workforce, smart 
and sustainable infrastructure, high environmental 
standards, world-respected corporate governance, 
and a power house in London and our other 
major cities.
Monica Kalia  Co-Founder & Chief Strategy 
Officer at Neyber
Future Technology 
Trends, Innovation  
and Collaboration
"Being a heavily regulated 
industry, conservatism and 
fear of change can often stifle 
innovation, however UK 
financial services firms have 
embraced new technology much 
faster than other centers.  In 
the UK, there has also been a 
clear trend that in-house IT 
expertise may not achieve the 
innovative goals a firm may 
have and adoption of vendors 
who create value-add solutions 
to help manage regulatory 
or work-flow efficiencies has 
been growing vs. other parts of 
the world."
Stephen Carney  Co-Founder & CEO of Quintain 
Analytics
37
UK FinTech State of the Nation
Future Technology Trends
Air - or water-based devices and vehicles, for example, Unmanned Aerial 
Vehicles (UAV) that fly or move without onboard human pilot. Drones can 
operate autonomously (via on-board computers) on a predefined flight 
plan or be controlled remotely.
Source: PwC - The Essential Eight Technologies, PwC. 
38
UK FinTech State of the Nation
   Healthcare and smart medical devices
   Tool and end use parts
   Prototyping
   Bridge manufacturing
   Supply chain optimization
   Customized products
   Remote location production 
39
UK FinTech State of the Nation
" We are at an inflection point in FinTech. 
The confluence of the growing tech 
sector in the UK along with banks and 
financial institutions moving towards 
cloud micro-service architectures gives 
us a once in a generation opportunity 
to build a genuinely world class new 
industry. The UK is perfectly placed 
for this, having its roots in the financial 
sector, AI, cloud computing and in 
London, Europe's largest tech hub."
Paul Taylor  Founder & CEO at Thought Machine 
Technology is evolving at an unprecedented pace and in an 
age of digital disruption, innovation can change an industry 
overnight. As a result, the majority of financial services 
CEOs in the UK (62%) believe that a focus on emerging 
technologies is the number one driver that will separate 
high-performing firms from the rest. It is therefore no 
surprise that UK financial services CEOs are keen to remain 
at the forefront of the technology adoption curve, more 
so than their global peers. Yet, many business leaders are 
unsure how to respond to emerging technology trends 
and consequently often adopt a 'fast follower' rather than 
an 'early adopter' approach. However, in order to remain 
competitive, organisations will have to make a concerted 
effort to explore and invest into emerging technologies. 
PwC analysed the business impact and commercial 
viability of more than 250 of the most innovative 
emerging technologies, identifying the "Essential Eight" 
technologies that will have the biggest impact, across 
industries, over the next three to five years. They are a 
reflection of a business environment that is rapidly moving 
towards a smarter, more autonomous technological 
ecosystem that provides both the digital experience that 
customers expect and the operational efficiency that 
business leaders demand. 
As the 'Essential Eight' technologies continue to mature 
over the coming years, they will increasingly be viewed 
as the foundational building blocks that organisations 
ought to explore to remain competitive. However, these 
technologies should not be explored in isolation, as what is 
shaping to be the most disruptive emerging trend, within 
the innovation ecosystem, is the convergence of individual 
technologies that will result in more powerful applications 
and greater overall results. 
Across the financial services industry, three main 
themes are emerging that demonstrate how individual 
technologies are coming together to create the next wave 
of innovation:
 
Intelligent Automation, combining 
Artificial Intelligence (AI), Robotic 
Process Automation (RPA) and the 
Internet of Things (IoT) 
Intelligent Automation enables human-like interactions 
to create a 'virtual workforce' of automated bots that are 
capable of handling tasks typically performed by humans. 
It can include machine based decision making without 
explicit programming, gathering data from unstructured 
sources like handwritten text or voice, or using natural 
language to respond to requests in a human-like way. 
By combining AI and the IoT with RPA, vast amounts of 
data from a range of sources (embedded sensors, smart 
devices, wearable technology etc.) can be collected to 
feed intelligent algorithms and automate processes. 
Within financial services, Intelligent Automation has the 
potential to yield returns beyond cost savings, including 
better customer and employee experience or quality 
improvements attributable to a reduction of errors. 
For example, Intelligent Automation could enable the 
automation of 'Know Your Customer' (KYC) requirements 
by implementing RPA for customer data capture 
and Machine Learning algorithms for the approval of 
associated workflows. 
Automated Trust, combining Artificial 
Intelligence (AI), Blockchain and the 
Internet of Things (IoT)
The primary application of Automated Trust is often 
framed within the manufacturing industry. However, 
the convergence of AI, Blockchain and the IoT to 
'automate trust' should not be underestimated within 
financial services. Automated Trust can, for example, 
bring trustworthiness to AI by providing clear audit 
trails. It can also help improve the trustworthiness of 
machine-to-machine interaction by providing a secure 
way to share data and coordinate decisions. With the 
increased adoption of Automated Intelligence within 
financial services, such as virtual assistants, technology 
to secure the trustworthiness of technology will become 
increasingly important. Auto insurance is a good example, 
where insurance payments are automatically credited to 
a claimant's account through a blockchain implemented 
authentication process as soon as an IoT connected 
sensor detects a defect.  
40
UK FinTech State of the Nation
Extended Reality (XR), combining 
Virtual Reality (VR), Augmented 
Reality (AR), the Internet of Things 
(IoT) and Artificial Intelligence (AI)
Extended Reality is the combination of technologies to 
provide fully immersive, digital experiences to achieve 
life-like simulations. The widespread availability of 
smart devices, breakthroughs in wearable technology 
and enhanced data analytics capabilities, enable the 
development of a seamless hardware and software 
ecosystem, the precondition for Extended Reality. It is 
redefining how humans interact with the virtual and 
physical world. 
The use of emerging technologies, and the benefits 
organisations can yield from them, strongly depends 
on the availability of good quality data. The cloud will, 
likewise, play a key role as enabler for innovation, 
evolving from a tool to cut costs towards a fundamental 
requirement for the agile implementation of emerging 
technologies. 
As organisations move forward and break through new 
innovation frontiers, the need to balance the benefits of 
innovation with associated risks will increasingly become 
important. A global study of the State of Information 
Security conducted by PwC, for example, shows that 
44% of organisations surveyed don't have an overall 
information security strategy. And less than a third have 
implemented controls for emerging technologies.  In 
order to build trust in their customers of the future, 
organisations will need to be transparent on how 
customer data is used, managed and protected. At the 
same time, they will need to embrace technological 
innovation in a more responsible way by proactively 
implementing robust security frameworks throughout 
their digital transformation journey. 
Keeping up with the pace of innovation and ever 
increasing customer expectations, while meeting complex 
regulatory requirements, will require financial services 
organisations as well as upcoming FinTechs to remain 
agile. Organisations will have to rely on relationship 
based business models. They will need to bridge the 
gap between technology and service providers while 
working with regulators to test and validate technologies 
in a highly regulated market. An 'outside in lense' will be 
necessary to balance the need between technological 
developments and the human-to-human interactions that 
customers still demand. 
The combination of the "Essential Eight" technologies is, 
undoubtedly, shaping to become the most disruptive trend 
within the technology innovation ecosystem. However, 
ultimately it is a combination of internal and external 
factors that will dictate how powerful the conversion 
of emerging technologies will become. Clearly, the 
availability of good quality data, information security 
standards, agility of business models and cooperation 
between business and government will play a key role 
going forward. 
Rav Hayer  Financial services Tech Partner and UK 
FinTech Lead at PwC
The rapid growth of FinTech in recent years 
has sparked change across the financial sector. 
The challenge from new FinTech brands, and 
opportunities presented by technology-led business 
models, are fuelling the creation of new value 
propositions for a broad spectrum of customers. 
Santander has a significant presence across the UK 
and in 10 global markets; supporting business, retail 
and investment customers. Our challenger mindset 
and agile ways of working encourage discovery 
and rapid experimentation. We can leverage our 
relationships to deliver faster, safer and more 
seamless products and services.
It is in the interests of our customers and the 
sector as a whole, for banks and FinTech startups 
to collaborate more closely.  We are working with 
partner FinTechs; smoothing their entry to market 
and providing access to a large data pool for testing 
and product refinement, whilst improving our own 
core capability and customer-centric solutions.  
For example, last year's launch of OnePayFX by 
Santander and Ripple Labs transformed ease of 
international payments for our customers, through 
low-cost, same-day, cross-border transfers, and 
peer-to-peer payments. 
A solutions-driven partnership between banks and 
FinTechs will help unlock the immense technological 
potential in the UK in order to better anticipate and 
meet customer need.
Stephen Dury  Head of Innovation at  
Santander UK
41
UK FinTech State of the Nation
Partnerships, Culture & Innovation:  
The key to future success
Banking Battlefield
Source: 11FS  Banking Battlefield: Winning the War For Customers
The UK has been at the centre of financial services for 
centuries. More recently, London has emerged as a 
global  hub for FinTech and innovation due to a melting 
pot of creative, technological, regulatory and purely 
opportunistic reasons. But we have to guard against 
complacency because everything that has been built 
and worked so hard to achieve can disappear without us 
releasing it already has.
This is especially true for the banks
While just a few years ago it was easier to dismiss new 
market entrants, firms including Exo, GoCardless, Monzo, 
Nutmeg, Revolut and TransferWise are now competing 
with traditional banks' business lines - from international 
payments, transfers and FX, through to savings, 
investments and retail accounts.
Meanwhile incumbents have to deal with ever increasing 
operating costs through legacy technology, resources 
and real estate. Their innovation spend is just layering 
more and more cost into their operational spend without 
decommissioning the spaghetti that keeps the show on 
the road. Billions spent just to keep the lights on.
This was an acceptable outcome when the game was 
purely about size of customer base and everyone in 
financial services was treading water at the same pace. 
But the world has changed and banks are now busy trying 
to readjust to the new realities of a new axis based around 
the level of intelligent digital services. 
For that to happen, we have to move away from the talk of 
digital transformation or innovation, and get down to the 
job of actually delivering meaningful change. 
Banks should be wary of the FinTechs, challenger banks 
and the tech titans who won't just copy the traditional 
banking model, they'll be doing something brand new 
that they would not expect which will cause tension in 
the market. 
But real fear should be saved for the real business-killers; 
apathy and a lack of respect for the challenge ahead. 
That's the real opponent. That's where the danger lies and 
that's what banks have been getting wrong for too long 
and what let Goliath lose to David. 
The important questions are not which technology wave 
to catch, startup to partner with, or emergent technology 
to back. They are, with new possibilities being opened 
up, what is the purpose of banking? What can the bank 
meaningfully do? What can you achieve with credibility, 
reliability and capability that customers would want?
42
UK FinTech State of the Nation
A cultural shift
Multiple new entrants have shown the big banks that if you 
come to market with expertise and the right culture with 
a real desire and hunger to deliver what customers need, 
then you can achieve amazing things.
Startups don't need to write a five year business case, 
they have no "digital" strategy and don't need to get 14 
committees to approve. They need to build something 
that customers want, so they can secure more investment 
and fast.
We're already seeing some promising signs from the 
incumbents. Goldman Sachs released Marcus to huge 
success and RBS launched Mettle, to service small 
businesses through a truly digital experience. These are 
the organisations that are trying to rekindle the desire to 
deliver better customer experiences and what that means 
for both their customers and themselves.
To achieve this they needed to be agile. Not postit notes 
and sheep dipping employees into Kanban training. True 
agility is not a methodology, it is in product development 
and engineering, where firms can move from an idea to it 
being safely and securely executed to their customers in a 
fraction of the time it currently takes.
New challengers can move at pace because they have 
a tech stack and a mentality that allows them to. Data 
is accessible, clean, and available in real-time. Their 
core banking engines are designed around integrated 
customer identity systems, not ones that are siloed 
around product lines. They're easily configurable, allowing 
the flexibility to create new financial products, and more 
importantly services, quickly and easily. 
Time for action
We are in a fascinating time with a continually shifting 
banking battlefield. The UK, and London in particular, has 
built an incredible financial services community that I am 
proud to be part of and work within.
However, we cannot be complacent. We need to ensure 
the services created here and those already becoming 
household names, continue to be founded, funded and 
supported as they have to make us the undoubted leader 
in the world.
The incumbent banks also need to change before 
everything they have built to create their legacy, and I 
mean in the good way, is eroded through inertia and a 
culture that is no longer fit for the truly digital age.
It's daunting. But it is also in our collective hands 
and I believe the UK has the talent, imagination and 
determination to do it and remain at the forefront of 
financial services.
Let's get back to work.
David M. Brear - Group CEO at 11:FS
The UK has a long tradition of entrepreneurial 
enterprise, and its global leadership in FinTech offers 
an opportunity to reshape financial services in the 
years to come.  To realise this vision, innovative 
thinking and experimentation must continue to be 
fostered by government and private sector alike.  
A culture of growth begins in translational university 
research, bringing cutting edge ideas from lab 
to launch.  In the commercial marketplace, the 
UK's array of preeminent financial institutions 
must promulgate a growth mindset and increase 
failure tolerance, to encourage experimentation.  
UK regulators must provide a receptive climate 
in which financial innovations can drive inclusion, 
promote equity, accelerate liquidity improvements, 
and demonstrate creativity on the world stage.  
By harnessing the vibrancy of the UK financial 
ecosystem and all of its participants, the UK can 
expand and internationalise its culture of innovation 
both to create economic value and improve society.
David Shrier - Associate Fellow, Said Business 
School at University of Oxford and Lecturer at MIT 
Media Lab
43
UK FinTech State of the Nation
Domestic FinTech 
policy and initiatives
" Millions of consumers and small 
businesses have already chosen FinTechs 
over banks, and this trend is only 
going to continue. In our case we have 
transformed the customer experience 
for small business owners. Initiatives 
like Open Banking enable us to set new 
standards in the industry and help unlock 
the true potential of small businesses." 
Christoph Rieche  Co-Founder & CEO at Iwoca
UK FinTech State of the Nation
44
Making the UK the 
best place in the world 
to start and grow a 
FinTech business
" UK customers are digitally savvy and 
expect top quality financial service 
products. We're proud to be able 
to do that in 2019. We're able to do 
this by getting support from the UK 
government and our UK based business 
partners. Without them, we would not 
have a sling to shoot from." 
Matt Leibowitz  Founder & CEO at Stake
The world is being transformed by a technological 
revolution, with established incumbent firms being 
challenged by digital innovators.  This is particularly true 
in financial services, where FinTech is changing the way 
customers bank, invest, insure and pay for things.  
Financial services is a key sector of the UK economy 
and so the government has invested heavily in ensuring 
that we are also at the forefront of this revolution. This 
investment has paid off, the UK has been independently 
assessed as the best place in the world for FinTech, 
and the government is committed to ensuring that this 
remains the case.
World leading financial services and 
thriving tech scene
The UK's comparative advantage in FinTech is rooted 
in our world-leading financial and professional services 
sectors  we have the markets, domestic skills, talent and 
expertise, and demand for products and services from 
corporate clients to provide a solid foundation for the 
growth of our FinTech sector.  
Combining this historic strength in financial services with 
a thriving tech scene, it's no wonder that the UK is the 
best place to start and grow a FinTech business. The UK is 
home to more billion-dollar startups than anywhere else 
in Europe and has strong domestic demand for FinTech 
products from consumers, with 42% of digitally active 
adults using the services of at least one FinTech firm and 
more than 20 million people using banking apps. 
Positive regulatory environment 
supporting innovation
The focus of UK government support for FinTech has been 
creating a positive regulatory environment for FinTech. 
The UK's main financial services regulator, the FCA has 
been given a strong competition objective, which led to 
them establishing an Innovation hub and Regulatory 
Sandbox.
The Innovation hub helps FinTech firms understand the 
regulatory framework and provides them with assistance 
when they make an application for authorisation.  Since 
2013 the Innovation hub has provided support to over 500 
businesses.  The Regulatory Sandbox creates a safe space 
for firms to test revolutionary new products, allowing 
them to serve real customers, while ensuring that risks to 
both customers and firms are well managed.  Since 2016 
almost 100 firms have tested products in the sandbox.
The government has also supported innovation in 
payment systems, creating a new Payments Systems 
Regulator (PSR) in 2015, the first of its kind in the world.  
Like the FCA, the PSR has been given a clear remit to 
promote and support innovation.  The government also 
legislated to allow non-bank payment service providers 
direct access to payment systems, creating a level playing 
field with banks.
Promoting competition in retail banking 
markets  
The UK is at the forefront of efforts to develop and 
implement Open Banking.  In 2017, the Competition and 
Market Authority, published its ground-breaking Retail 
Banking Market Investigation Order, which required the 
nine largest banks in the UK to build standardised systems 
that allow consumers to safely and securely share their 
financial information with FinTech firms.
Open Banking allows firms to offer innovative solutions to 
consumers, from better financial advice, to cheaper loans. 
The standardisation that sits at the heart of the UK's Open 
Banking project, and differentiates it from similar activity 
in other jurisdictions, also makes it easier and cheaper 
for FinTech firms to build these services and improves the 
quality of the products they can offer consumers. Open 
Banking also allows consumers to make payments without 
needing to use a credit or debit card.
45
UK FinTech State of the Nation
The FinTech Sector Strategy
The government has made great strides in supporting 
FinTech, but it also recognises that there are always 
opportunities to do more. The government's first FinTech 
Sector Strategy, launched in March 2018, sets out its plans 
to maintain and extend the UK's comparative advantage 
in FinTech, and included details of a number of innovative 
new projects:
Building RegTech solutions  the UK's financial 
regulators, the FCA and the Bank of England have 
developed a digital regulatory reporting project.  This 
work, delivered in partnership with industry, is focused 
on making the process of achieving and maintaining 
compliance with regulations as efficient and effective 
as possible.
Helping FinTech firms access talent  ensuring the right 
mix of skills is critical to the success and growth of the UK's 
FinTech sector. In order to build a domestic talent pipeline, 
the government has partnered with Barclays to deliver a 
Connect with Work project, which aims to introduce young 
people from diverse backgrounds to careers in FinTech.
Exploring new forms of financial services 
infrastructure  the government's financial services 
Trade and Investment Board has sponsored work to 
investigate the potential benefits associated with shared 
utilities that promote economies of scale in complex 
financial services markets.
Facilitating partnerships with incumbents  the 
government-funded FinTech Delivery Panel published a 
set of 'Onboarding Guidelines' in November 2018, which 
help FinTech firms partner with incumbents.  Barclays, 
Lloyds Banking Group, HSBC, RBS and Santander have 
committed to fully implementing these guidelines.
Delivering the benefits of FinTech across the UK  
at present the UK's FinTech sector is concentrated in 
London, with 80% of FinTech firms based in the capital. 
To ensure that the whole of the UK benefits from FinTech, 
the government has announced six Regional FinTech 
Envoys charged with fuelling the growth of firms across 
the country.
Harnessing the potential of emerging technologies  
the government's FinTech Sector strategy announced 
the creation of a Cryptoassets Taskforce, comprised 
of HM Treasury, the FCA and the Bank of England, to 
explore further the risks of cryptoassets and the potential 
benefits of the underlying distributed ledger technology 
(DLT). The Task Force published its final report in October 
2018, which set out actions the government and financial 
regulators will take to mitigate the risks that cryptoassets 
pose to consumers and market integrity; to prevent the 
use of cryptoassets for illicit activity; to guard against 
threats to financial stability that could emerge in the 
future; and to encourage responsible development of 
legitimate DLT and crypto-asset related activity in the UK
.
UK FinTech Week
In 2017 and 2018, HM Treasury hosted an International 
FinTech Conference, bringing together investors, UK 
FinTech firms, and key industry figures to celebrate the 
UK's position as a global leader in FinTech and interact 
with policy-makers on the evolving landscape for these 
businesses. Keynote speeches, panel discussions, and 
workshops highlighted the UK's innovative approach 
to regulation and policy that makes our sector both a 
global leading FinTech hub and a valuable destination for 
investment. Speakers included Mark Carney, Governor 
of the Bank of England, Adrienne Harris, former adviser 
to the Obama administration, and Andrew Bailey, Head 
of the FCA. The best of the UK's FinTech talent also had 
the opportunity to pitch directly to global investors. Each 
conference brought together over 100 FinTech firms 
and over 400 domestic and international investors, 
leading to an increase in capital investment in the UK 
sector. HM Treasury look forward to supporting Innovate 
Finance's Global Summit and a range of events taking 
place during UK Fintech Week 2019.
By HM Treasury
 
46
UK FinTech State of the Nation
International 
initiatives for UK 
FinTech
" WorldRemit sends money from 50 to 
150 countries, operating in over 6,500 
remittance corridors and serving 4 
million customers worldwide. Access 
to capital, diverse talent and a growing 
migrant population with a strong 
appetite for low-cost digital alternatives 
to send their money back home, have 
been crucial to our fast growth. The 
UK's progressive approach to FinTech 
regulation enables early stage companies 
to innovate, scale at pace and compete on 
the global stage."
Ismail Ahmed - Founder & Executive Chairman at WorldRemit
47
UK FinTech State of the Nation
Making UK FinTech 
more competitive 
globally 
As the UK continues to focus on its international trade 
policy, this presents an important opportunity for the 
financial services sector and UK FinTech exports. The UK 
is taking a creative and ambitious approach to financial 
services trade policy to facilitate detailed discussions on 
cross-border market access, ensure advanced, fair and 
transparent operating environments, and support the 
growth and competitiveness of the UK FinTech sector with 
new financial services, payments and data at the forefront 
of policy development.
As the UK's financial services industry expands it will 
ensure the continued competitiveness of the City of 
London as a major global financial centre. This will support 
growth and jobs in the UK and our partners' economies, as 
new policy provisions are implemented and trade friction 
is reduced to develop more effective shared markets.
The UK remains a world-leading destination for the best 
global talent and our migration system helps to ensure 
we are at the forefront of digital and scientific advances. 
The Exceptional Talent Visa is available to leaders in the 
digital technology, science, arts and creative sectors, 
ensuring UK businesses in these fields have access to the 
best talent from across the world; while our new Startup 
and Innovator Visas make it faster and easier for talented 
entrepreneurs to come to the UK and start a business. 
FinTech is clearly a growing sector of importance for the 
UK internationally. The sector's growth is unprecedented 
and there are several ongoing international initiatives that 
the UK government is leading on for the benefit of the UK 
FinTech ecosystem, both domestically and abroad. 
These include:
FinTech Steering Board 
 
DIT's FinTech steering board brings together academics, 
industry experts, government and regulators to drive 
investment into the sector, which is at the forefront of the 
UK's global technology and innovation proposition.  
The Board is chaired by the City of London's Lord Mayor. 
 
 
FinTech Bridges
 
The UK has entered 5 FinTech Bridge agreements 
with other FinTech hubs including Singapore, South 
Korea, China, Hong Kong, and Australia. These bespoke 
agreements create valuable opportunities for the UK 
by overcoming barriers to international market entry 
and linking UK-based FinTechs with opportunities for 
international investment through:  
  Collaboration between key players in the UK FinTech 
sector and in Bridge markets on emerging market trends 
  Regulatory agreements that support firms to overcome 
market access barriers in each jurisdiction
By sharing knowledge and best-practice with Bridge 
jurisdictions, and aligning international FinTech policy 
development, we are increasing opportunities for FinTech 
firms to export solutions to key markets at pace. Each 
Bridge enables firms licensed by the FCA to be referred 
directly to regulators in Bridge markets, easing the 
process of obtaining a license and smoothing access to 
priority international markets.  
FinTech Bridges Pilot Program
DIT's primary goal for the Bridge Pilot Program in the 
coming months is to demonstrate the sucess of the UK's 
world-leading FinTechs and to support their business 
growth. The Pilot Program has been devised to be run 
across the Australia and Hong Kong Bridges to establish 
the success in helping companies to scale from the UK 
into a Bridge market. 10 UK FinTech companies will be 
selected to participate in each of the two programmes 
(Australia and Hong Kong). A tailored support programme 
will be developed for each of the FinTech companies to 
run throughout 2019, culminating with a trade mission 
to a flagship conference in market. The ultimate goal 
of the programme is to provide essential, connections 
and assistance, thereby accelerating their ability to 
set-up business in the bridge market during the year. 
Once the pilot is complete, the aim is to put forward 
recommendations to create a scalable programme across 
other Bridge markets supporting and accelerating the 
growth of bilateral trade related to FinTech.
Emerging markets 
 
The UK is a globally recognised hub of FinTech excellence, 
with a wealth of unique expertise to offer developing 
countries. Leveraging the City of London to empower and 
enable FinTech in emerging markets to grow successful 
business has the potential to stimulate growth, create 
jobs, drive financial inclusion and make it easier for UK 
companies to enter and invest in markets of the future.
48
UK FinTech State of the Nation
This is where departments across UK government, such 
as the Department for International Development (DFID) 
have long championed the significant role that financial 
technology can play in increasing access to, and reducing 
the cost of, financial services in developing countries. 
Learning from the UK's success at pioneering regulatory 
tools and approaches to enable FinTech growth, DFID is 
working with regulators and policymakers across a range 
of developing countries to help put the building blocks 
in place for well-functioning digital finance ecosystems, 
including modernising payment infrastructure and 
supporting conducive regulatory environments. In 
partnership with Vodafone, DFID support provided seed 
funding to M-PESA in 2007, one of the most successful 
mobile money services globally, radically expanding 
financial inclusion in East Africa and providing a platform 
on which emerging FinTech continues to flourish. 
As part of this vision, and to showcase how support may 
be provided for the development of FinTech more widely, 
DIT is currently piloting ways of working together with 
DFID. FinTech can be an enabler for broader financial 
reform and stability, as well as in introducing innovation 
which may directly benefit those who are the most 
financially excluded. It is for this reason that partnering 
with DFID will not only help in better sharing regulatory 
best practice abroad, but in also better matching where 
UK (and international) FinTech expertise might be best 
deployed to help drive efforts around financial inclusion, 
and the digitisation of financial services. 
By creating sound, stable and supportive financial 
ecosystems abroad, coupled with facilitating useful 
collaborations between the UK FinTech sector and those 
in emerging markets, our ambition is to promote greater 
financial inclusion and and drive greater cross-border 
flows of activity.  
UK-Africa FinTech Partnership
In August 2018 the Prime Minister announced the first 
UK-Africa FinTech partnership, which aims to deepen 
collaboration and build relationships between African and 
UK FinTech industries. The partnership is coordinated by 
DFID and has three features:
1.  Identifying business opportunities  the Africa FinTech 
Investment Group is a sub-group of DIT's FinTech 
Steering Board and brings together the collective 
expertise of the UK and African FinTech communities 
to identify investment opportunities to support the 
development of the thriving African FinTech industry.
2.  Building capacity within the regulators  a DFID 
partnership with the FCA will support regulation of 
FinTech in Africa, to be piloted in Kenya and Nigeria.
3.  Taking African FinTech innovations to scale  a 2m 
FinTech fund is helping Nigerian FinTechs with a focus 
on financial inclusion to take their innovations to scale. 
DFID may expand this offer to other African markets. 
Women in FinTech
The Women in FinTech Global Initiative is aimed at bringing 
more female entrepreneurs to the UK and to help make the 
UK's FinTech ecosystem more diverse.
The initiative has three pillars. First is creating an 
opportunity for likeminded women to meet, inspire, advise 
and mentor each other.  Second is the chance to connect 
female entrepreneurs with a supportive investment 
community that understands the challenges that women 
face. Third is to provide valuable scaling guidance by 
working with accelerators and incubators to offer women 
support through their programmes. NatWest is the first 
company to support DIT's accelerator programme by 
offering places to women FinTech entrepreneurs to take 
part in the 18-month fully-funded programme. The cohort 
will be offered bespoke coaching, learning, workshops and 
free office space.
The VCs and investors supporting the initiative include 
Motive Partners, Anthemis Group and Octopus Ventures.
David Bartlett  Head of Financial & Professional 
Services at Department for International Trade
49
UK FinTech State of the Nation
The UK has built a reputation as the home of 
innovative trailblazers in the payments sector. Bacs 
launched in 1968, and we were a first with Faster 
Payments in 2008. Over the last decade Faster 
Payments transitioned from a radical idea around 
enabling instant payments to become a platform 
for innovation and a world leader. It now has nearly 
30 participants in the UK, and in the last year alone, 
transaction volumes increased by 23%. As the global 
appetite for state-of-the-art payments solutions 
grows, the UK continues to set the pace. We now 
take for granted transferring money in real-time, 
paying by contactless or smartphone  however 
innovation is not just about technological advances, 
it's about adding real value to users. At Vocalink, 
we believe 'thoughtful innovation' is central to the 
payments sector by making the system safer and 
more resilient, and tackling both current and future 
consumer needs.
Vocalink's strong heritage in the UK includes the 
designing, building and operating of the nation's 
payments infrastructure. Today, Vocalink is active 
all around the world, driving financial inclusivity 
and powering economies through technology-led 
solutions.
It is our belief that innovation is thriving in the UK, 
particularly in the payments sector, and thoughtful 
innovation will continue to be at the heart of what 
we do.
Paul Stoddart  CEO at Vocalink & President of 
New Payments Platforms at Mastercard 
Key milestones 
2008
2009
2010
2011
2012
2013
2014
2015
Financial Crisis
Global Financial Crisis created 
an impetus for numerous 
regulatory reforms and a shifting 
public perception towards 
financial services, creating an 
opportunity for new, competitive 
players to join the market with a 
technology-first approach.
FCA's Project 
Innovate Launch
The purpose was to help 
firms tackle regulatory 
barriers to innovation, be it 
through clarifying regulatory 
expectations, examining the FCA's 
own rules or enacting policy 
changes. This in turn, provided 
firms the space to innovate in the 
interests of consumers. 
Innovate Finance 
Launched
Founded in August 2014, Innovate 
Finance, an independent 
membership organisation, 
formed out of a government 
consultation to represent the 
FinTech sector and promote 
FinTech member companies. 
The Innovate Finance Global 
Summit was also launched as 
a flagship event to convene the 
global FinTech community to 
the FinTech capital of the World, 
London.
UK FinTech State of the Nation
50
Launch of  
FCA Sandbox
Launch of  
FinTech North
Launch of  
FinTech Scotland
2016
2017
2018
First FinTech 
Bridge
Singapore was the first FinTech 
bridge. There are now 5 bridges 
with Singapore, China, Hong 
Kong, South Korea and Australia.
Retail  
Banking Market 
Investigation Order
The Competition and Market 
Authority published the Retail 
Banking Market Investigation 
Order requiring the nine 
largest banks in the UK to build 
standardised systems that allow 
consumers to safely and securely 
share their financial information 
with FinTech firms.
Launch of  
UK Open Banking 
and PSD2 
British Patient 
Capital (BPC)
The British Business Bank 
announced the launch of British 
Patient Capital (BPC), a 2.5 
billion investment vehicle to help 
innovative UK startups become 
world-class leaders through long-
term investment by investing 
in venture and growth capital 
funds. By investing alongside 
the private sector, British Patient 
Capital will support 7.5bn of 
investment for British businesses.
Launch of HMT 
FinTech Sector 
Strategy
The government's first FinTech 
Sector Strategy, launched in March 
2018, set out its plans to maintain 
and extend the UK's comparative 
advantage in FinTech.
51
UK FinTech State of the Nation
Closing remarks
As we reflect on the last ten years, the face of financial and 
professional services in the UK has transformed. Innovation is 
now firmly at the heart of the sector and the UK has emerged to 
become the global hub for FinTech.
The UK FinTech sector employs over 76,500 people and 
generates a revenue of 6.6 billion pounds. Whether it be 
investment in FinTech, the role of the regulator, government 
policy or the abundance of skills, talent and diversity; the UK has 
laid solid foundations for its future in the FinTech industry. 
The strength of the UK's growing FinTech sector is fast receiving 
global interest. During my visits overseas, FinTech has become 
a major topic of conversation; international companies are keen 
to hear about the strength of the UK's FinTech ecosystem and 
explore opportunities for collaboration with British FinTech firms. 
When promoting the UK's FinTech sector abroad, it is essential 
that we have a cohesive voice, both at government and industry 
level. The State of the Nation is a perfect example of this; revealing 
the scale and depth of FinTech across the UK and acknowledging 
the fundamental work of government and industry in creating a 
welcoming and healthy environment for FinTech firms to thrive.
As Chair of the Department for International Trade's FinTech 
Steering Board, this document will act as a benchmark for future 
discussions around FinTech, offering a strong understanding of 
the UK FinTech industry today, so we can build on our success 
for tomorrow.   
The Rt. Hon the Lord Mayor of City of London Peter Estlin
52
UK FinTech State of the Nation
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 Beauhurst - Why you should keep an eye on accelerators and their cohort (18th January 2019)
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 Centre for Entrepreneurs (CFE) - Business formations recover to reach new high in 2018 (14th January 2019) 
 City of London Corporation - Global investment: driving UK jobs and growth in financial services (2018)
 Competition and Markets Authority's (CMA) - Retail banking market investigation - Final Report (2016) 
 Crunchbase Data - Funding Circle (IPO stock price) assessed: 26 March 2019 - also available at: https://www.crunchbase.com/organization/funding-
circle#section-ipo-stock-price
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crunchbase.com/organization/monzo#section-funding-
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2018), available at: https://www.fca.org.uk/news/speeches/regulating-innovation-global-enterprise
 FCA - Regulatory sandbox lessons learned report (2017) 
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 HM Revenue & Customs - Research and Development Tax Credit Statistics (2018)
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 Innovate Finance - UK FinTech VC Investment Sector Analysis 12 February 2019, Data provided by Pitchbook
 Intellipaat - The Convergence of Blockchain, IoT and AI (3rd September 2018) - also available at: https://intellipaat.com/blog/convergence-blockchain-
iot-ai/
 Tech Dragons - Interview of Chris Ganje, CEO of Amplyfi by Nicholas Fearn (Tech Dragons) (5th January 2019) - also available at: http://techdragons.
wales/interview-chris-ganje-ceo-of-amplyfi/
 Investni - 300 New Tullett Prebon Jobs Will Contribute Over 9.9m in Salaries to Economy Each Year (2nd August 2016) - also available at: https://
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convergence-of-ai-and-blockchain-whats-the-deal-60c618e3accc
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 Pitchbook Data: VC and CVC average value per deal (UK FinTech investment) assessed 18 October 2018, Analysis by KPMG LLP in the UK
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 PwC - 22nd Global CEO Survey (2019) 
 PwC - Automation Now: Your business - automated and empowered - also available at: https://www.pwc.com/us/en/services/consulting/library/
unlocking-automation-value.html 
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report-2018
53
UK FinTech State of the Nation
Contributors 
11:FS is the challenger firm defining and building digitally native financial services. They've 
assembled the world's top banking, FinTech and insurance leaders to transform traditional 
banks from within, and build new banking services from scratch. They field interdisciplinary 
teams bringing the best designers, product experts, consultants, researchers, technologists 
and domain specialists together to deliver tangible outcomes in the shortest possible time 
frames. By combining corporate expertise with startup agility in the way they work, the way 
they think and the way they build propositions, they are uniquely placed to help overcome 
legacy systems, create new business models, and develop the best next-generation, customer-
centric services.
The British Private Equity & Venture Capital Association (BVCA) is the industry body and 
public policy advocate for the private equity and venture capital industry in the UK. For more 
than three decades they have represented the industry and delivered authoritative research 
and analysis, proprietary publications, specialist training, topical conferences and best practice 
standards. Their membership comprises more than 750 influential firms, including over 300 
private equity and venture capital houses, as well as institutional investors, professional 
advisers, service providers and international associations. They work together to provide 
capital and expertise to growing businesses, to unlock potential and to deliver enhanced 
returns to the millions who directly and indirectly invest in their industry.
The financial and professional services industry is key to the ongoing prosperity of the UK. It 
provides exports more than double those of any other sector, and significant contributions to 
employment, tax and productivity  across the country. The City of London Corporation works 
with partners in industry and local and national governments across the UK, to keep the UK 
competitive into the future: nurturing innovative sectors, securing the best environment for 
firms to thrive, supporting inclusive and sustainable growth, and showcasing the sector's UK-
wide offer. They work to promote the industry to overseas markets: attracting and retaining 
investment, building partnerships and sharing expertise to secure long-term, worldwide 
trading relationships.
Deloitte LLP is a leading professional services firm committed to making an impact that 
matters for our clients, our people and society. They bring a breadth of skills and industry 
knowledge in providing high-quality audit, advisory, tax, legal and consulting services to clients 
across the financial services industry and FinTech ecosystem. As part of a globally connected 
network of member firms in more than 150 countries, Deloitte's industry specialists provide 
comprehensive, integrated solutions to the FinTech sector to help their clients meet their 
goals, plan new strategies, and keep up-to-date on changes in technology, regulation and 
customer expectations.
At EY financial services, they share a single focus  to build a better financial services 
industry, not just for now, but for the future. They train and nurture their inclusive teams to 
develop minds that can transform, shape and innovate financial services. It's because they 
have minds made for financial services that they ask better questions. Better questions lead to 
better answers that benefit their people, their clients and their communities. It's how they play 
their part in building a better working world.
The Financial Conduct Authority is the conduct regulator for 58,000 financial services firms 
and financial markets in the UK and the prudential regulator for over 18,000 of those firms.
FinTech North is the focal point for the FinTech community in the Northern Powerhouse. 
It is an open and collaborative platform for sharing ideas, challenges and best practice, 
for showcasing innovative startups and scale-ups and for facilitating the connections and 
collaborations which create real value for businesses and consumers.
54
UK FinTech State of the Nation
FinTech Scotland has been established to secure Scotland's place as a top five global FinTech 
centre. To succeed they bring together entrepreneurs, the established financial sector, 
the public sector, accelerators, investors, consumer groups, technology and service firms, 
universities and skills agencies.
Northern Ireland attracts global companies because of its blend of an exceptionally skilled 
workforce with a strong work ethic and highly competitive operating costs. The region has 
accumulated a number of industry accolades with Belfast ranked as the top destination for 
financial technology investment projects, the top city in Europe for new software development 
projects and the top international location for US cyber security development projects. Invest 
Northern Ireland, the region's economic development agency, works in an ongoing partnership 
with investors offering business advice and financial assistance in order to develop and expand 
the business and to improve capability and international competitiveness.
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with 
approximately 16,300 partners and staff. KPMG is a global network of professional services 
firms providing Audit, Tax and Advisory services. They operate in 153 countries and territories 
and have 207,000 people working in member firms around the world. The independent 
member firms of the KPMG network are affiliated with KPMG International Cooperative 
("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity 
and describes itself as such. KPMG FinTech professionals include partners and staff in over 
50 FinTech hubs around the world, working closely with financial institutions and FinTech 
companies to help them understand the signals of change; identify the growth opportunities; 
and to develop and execute on their strategic plans.
At PwC, their purpose is to build trust in society and solve important problems. They are 
a network of firms in 158 countries with over 250,000 people who are committed to 
delivering quality in assurance, advisory and tax services. They have an end-to-end FinTech 
team engaged at all points of the innovation ecosystem. Working across both start-ups and 
established financial services firms, their team advise on strategy, integration of FinTech into 
business processes, facilitate partnerships and offer support as firms scale and mature.
Tech Nation is a government-backed organisation helping to accelerate the growth of the 
digital tech sector across the UK, and make the UK the best place in the world to imagine, start 
and grow a digital tech business. Its mission is to empower tech entrepreneurs to grow faster 
through knowledge and connections, to build a UK economy that is fit for the next generation. 
It does this by running growth programmes, developing digital entrepreneurship skills through 
its online Digital Business Academy, through its visa scheme for exceptional talent and by 
championing the UK's digital sector through data, stories and media campaigns.
Established in 2012, Whitecap Consulting is a regional strategy consultancy headquartered in 
Leeds, with offices in Manchester, Milton Keynes, Bristol and Newcastle. Whitecap works with 
executives, boards and investors of predominantly mid-sized organisations, typically with a 
turnover of c10m-300m, helping them analyse, develop and implement growth strategies. 
Whitecap works with clients across multiple sectors, with financial services and FinTech being 
key areas of focus.
55
UK FinTech State of the Nation
invest.great.gov.uk
Department for International Trade
The Department for International Trade (DIT) helps businesses export, drives 
inward and outward investment, negotiates market access and trade deals, 
and champions free trade.
We are an international economic department, responsible for:
  supporting and encouraging UK businesses to drive sustainable 
international growth
  ensuring the UK remains a leading destination for international investment and 
maintains its number one position for international investment stock in Europe
  opening markets, building a trade framework with new and existing partners 
which is free and fair
  using trade and investment to underpin the government's agenda for a Global 
Britain and its ambitions for prosperity, stability and security worldwide.
Disclaimer
Whereas every effort has been made to ensure that the information in 
this document is accurate, the Department for International Trade and the 
Contributors accept liability for any errors, omissions or misleading statements, 
and no warranty is given or responsibility accepted as to the standing of any 
individual, firm, company or other organisation mentioned.
 Crown Copyright 2019
You may re-use this information free of charge in any format or medium, strictly 
in accordance with the terms of the Open Government Licence.  
To view this licence, visit: 
www.nationalarchives.gov.uk/doc/open-government-licence 
or email: psi@nationalarchives.gsi.gov.uk.
Where we have identified any third party copyright information in the material 
that you wish to use, you will need to obtain permission from  
the copyright holder(s) concerned.
Any enquiries regarding this material should be sent to us at 
enquiries@trade.gov.uk
Published April 2019
by Department for International Trade