Fintech Boom in the United Kingdom Despite Brexit Worries

The ravages of a Brexit have failed to dissuade investors from plowing money into the UK’s burgeoning FinTech sector.

Foreign investment levels in the United Kingdom’s FinTech arena are soaring, in spite of the exodus of European Union migrant workers, and lower levels of net migration into the UK. British financial technology (FinTech) is among the most attractive in the world.

Between January and June 2017, the UK enjoyed some £433 million worth of investment – far greater than most other regions. What is particularly notable about the level of investment in UK FinTech is that it is some 33% higher year-on-year. According to Innovate Finance, UK FinTech is one of the few industries that is seeing strong growth in the face of rising economic pressures. Most of the funding into UK startups came from abroad.

UK Ranks Among the Crème de la Crème

In terms of its global competitiveness, the UK has dramatically improved its ranking in FinTech. It is now in third position, with only China and the US in front. There were growing concerns that the UK’s decision to break from the European Union would spell disaster for the FinTech industry.

That has not happened. The fateful June 23, 2016 referendum led to massive capital flight from the banking and finance sectors. Many big-names such as Goldman Sachs, JP Morgan, Citibank, Wells Fargo Corporation, and even HSBC are in the midst of relocating operations outside of the United Kingdom.

Britain, and the City of London in particular, remains the epicentre of European financing. That status threatens to be upended with Brexit-related stresses. The financial technology arena in the United Kingdom is perhaps the most advanced in all of Europe, with a strong emphasis on cryptocurrency trading such as BTC, Litecoin, Dogecoin, Ether, and Dash.

Blockchain technology is all the rage, and investors are wasting no time cashing in on the UK’s entrepreneurial capital. In 2015 however, investment in FinTech in Q1 and Q2 reached well over £500 million, and approximately £1 billion for the year. During the first three weeks of July 2017, the UK FinTech sector raised over £120 million.

Entrepreneurs Powering the FinTech Boom in the UK

Since the UK referendum in June 2016, a modicum of calm has been restored to financial markets. The GBP crashed to a 32-year low, from 1.48 to the dollar, but has maintained respectability above the critical 1.30 level. While many of the plaudits must go to the Bank of England, and governor Mark Carney, it is the risk-on approach of entrepreneurs that makes it all possible. There are concerns about the brain drain that is currently occurring in the United Kingdom. Statistics show that many European workers are leaving the UK, owing to a weaker GBP and concerns over a Brexit. This is affecting the FinTech arena.

However, many inspirational stories abound, including that of self-starter Sam Ovens. While Ovens is a Kiwi who built up enormous wealth by the age of 25, his story has quickly inspired a generation of millennials in New Zealand, Australia, the United States and the United Kingdom. His focus is on digital marketing, and he now sports a business model that generates $100,000 per day selling automated webinars. His out-of-the-box thinking is precisely the model that inspires FinTech entrepreneurs in their groundbreaking innovations.

UK Government Acknowledges FinTech’s Contribution

FinTech is a big business in the UK. According to government statistics, more than 60,000 jobs are available in the FinTech sector and this contributes an estimated £8 billion to the UK economy. Britain already has one of the most developed banking and financial sectors in the world, and it is this platform upon which FinTech can grow and prosper. This will also make it increasingly difficult for other European cities such as Paris, Munich, Berlin, Prague, and the like to compete – FinTech is predominantly an Anglophone arena. Britain is at the heart of these groundbreaking developments, often exporting its intellectual capital and digital prowess to cities across the United States, Canada, and Europe.