Even though it may have been recently overtaken by New York as a Financial hub, London has one good thing going for it – A global boom in FinTech investment, according to research by consultancy firm Accenture.
Global investment in FinTech ventures has more than tripled from $928 million in 2008 to $2.97 billion in 2013 and, over the past three years, such investment increased at more than four times the rate of overall venture-capital investment. Although the United States remains the dominant market for so-called “FinTech ” investment, the fastest growing region is now the United Kingdom and Ireland (UKI). Technologies and platforms that find themselves funded could include peer-to-peer lenders, online currency exchanges and crowdfunding sites.
Deal-volume, mostly related to London, has been growing at an annualized rate of 74 percent since 2008, compared with 27 percent globally and 13 percent in Silicon Valley.
During the same period, the value of fintech investment in UKI increased nearly eightfold to $265 million in 2013. The annualized growth rate (51 percent) was nearly twice the global average (26 percent) and more than twice that of Silicon Valley (23 percent).
As a result of the rapid growth in UKI, which accounts for more than half (53 percent) of all investment in Europe, London has emerged as the fintech capital of Europe, according to the study. Four of the world’s ten largest banks possess either global headquarters or European headquarters in London, aided in part by the capital’s traditional strength in financial services, as well as its thriving IT sector which has enjoyed an entrepreneurial revival in recent years. Today, there are roughly 135,000 FinTech workers in the UK.
“The FinTech boom is a huge opportunity for London with its well-developed financial and technology industries,” said Julian Skan, Accenture managing director overseeing the FinTech Innovation Lab London. “It is also crucial to London maintaining its position as the leading global financial center because of the growing importance of technology to the financial industry.”
The growth of London’s fintech cluster has been driven by its strength in financial services and a thriving tech sector that has enjoyed an entrepreneurial renaissance in recent years. Four of the world’s ten biggest banks have either global headquarters or European headquarters situated in London. There are approximately 135,000 financial-services technology workers in UK, according to the Accenture study.
Although Ireland has a developing tech industry of its own, it is closely integrated with London’s fintech cluster by incubating fintech companies that look to London’s large financial center in pursuit of customers, talent, partnerships, and funding.
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