Fintech leaders still back the UK. Don’t make them regret it
Fintech is one of the UK’s great economic success stories. But there is a danger in assuming it will remain that way, writes Nick Murray-Leslie
For all the anxiety about Britain’s economic performance, investment and competitiveness, London remains one of the few places in the world where banking, technology, capital markets, regulation and entrepreneurship exist at genuine global scale.
Fintech is one of the UK’s great economic success stories. But there is a danger in assuming it will remain that way simply because it has been until now.
Incumbency has never been a particularly good strategy. Just ask Marconi, Nokia or more recently VW.
What do fintech leaders think of Britain?
This week, the global fintech industry is descending on the City for London Fintech Week.
Ahead of the gladhanding and endless discussion about AI, we asked 100 fintech leaders what they think about the industry, its prospects and Britain’s position in an increasingly fierce global race.
These are the people actually building companies, raising money, hiring people and competing internationally. At a time when the national conversation can feel relentlessly gloomy, fintech leaders are telling us that Britain still has something valuable.
The government clearly recognises the importance of the sector and has financial services and fintech at the heart of its growth agenda, alongside efforts to make Britain a more attractive place to invest, innovate and scale technology businesses.
Despite a difficult economic backdrop, 94 per cent of fintech leaders believe the UK remains a good place to start and grow a fintech business.
But there are also warning signs flashing. The leaders we surveyed see significant risks to the UK’s competitive position, particularly as other financial centres move quickly on artificial intelligence, digital assets, payments and the infrastructure that will underpin the next generation of financial services.
Singapore, Dubai, Hong Kong and other centres are investing aggressively in technology, talent and regulation designed to attract the companies that will define the next decade of finance. Capital and entrepreneurs have choices. They will go where they believe they can build fastest.
The digitisation of finance
The lanyard banter taking place this week across London is ostensibly about AI, payments, digital assets, investment and the future of financial infrastructure but are ultimately conversations about Britain’s economic competitiveness.
AI, yes that again, is a particularly good example because it is already changing how financial companies develop products, communicate with customers, fight fraud and operate internally.
The winners will be those that create the conditions in which companies can actually deploy it.
That logic applies to digital assets and tokenisation, a point well made by UK Finance’s big wig Bob Wigley in his Morning Wire piece recently.
Financial markets are moving towards a world in which traditional and digital finance increasingly overlap. London has an extraordinary concentration of institutions, expertise and market infrastructure with which to capitalise on that shift.
The City has spent centuries building institutions based on trust, law, deep pools of capital and international connections. Combine that with Britain’s technology ecosystem and regulatory expertise and the UK has an asset that is extremely difficult for competitors to replicate.
Government cannot create the next great British fintech company, nor should it try. But it can determine whether the founders of that company believe Britain is the best place to build it.
That means competitive regulation, access to capital, support for scaling businesses, a serious approach to skills and immigration, and much greater urgency around technologies such as AI and digital assets.
Fintech is no longer a fashionable offshoot of the technology industry. It is increasingly part of the infrastructure through which money moves, businesses get paid, consumers invest and financial markets operate.
As fintech leaders gather in London this week, there is plenty of goodwill in the bank for Britain. The people running the industry still believe strongly in the UK. The government’s job now is to make sure they have just as much reason to believe in it five years from now.
Nick Murray-Leslie is the co-founder of Chatsworth Communications