Fintech is the application of technology in the provision of financial services. Broadly, it includes alternative finance like peer-to-peer platforms, payment services, and the use of digital currencies such as bitcoin. There are several conditions that determine how a city ranks as a fintech hub including;
A study conducted by Ernst & Young compared the leading innovation centres in the world such as Berlin, Singapore, California and London. London had the highest score. Philip Hammond, the Chancellor of the British Exchequer, notes that fintech sector is currently adding over £6.6 billion into the UK economy and attracting over £500 million worth of investments.
London is the largest centre for fintech in the world with investment growing faster than anyplace in the world. It leads the world in fintech because its startups look beyond the domestic market. Two notable examples are Transferwise that offers financial transfer services to customers in any part of the world and Markit, a financial data company. Each of these companies is worth more than $1 billion effectively qualifying as unicorns.
According to Alicia Navarro, the CEO of Skimlinks, London is not a fintech hub just by chance. The city has all the necessary ingredients; for example, it is a leading financial hub in the world. The fact that even before the advent of financial technology, the city led in traditional finance gave it a head start in fintech innovation. Moreover, the city houses a good number of potential investors, talented people, and potential customers.
The achievement has not come without the effort of the government. Significantly, the mayor of London takes part in the Fintech Innovation Lab London accelerator programme. The city has its version of the Silicon Valley located in East London. Tech giants like Google, Facebook, Intel and, Cisco have invested here.
Her Majesty’s government allows fintech startups to try their products in the market with little restriction. This has the effect of fostering innovation. Below are some of the world’s leading fintech companies located in London.
Founded in 2010, Funding Circle focuses on peer-to-peer loans for small businesses. Over $1 billion of loans have been offered through the platform.
Transferwise was established in 2011 and offers international money transfer services. The company is valued at more than $1 billion.
Blockchain was founded in 2011 as a bitcoin wallet and processing provider. Today, the company leads in bitcoin wallet provision in the world with more than 4 million users.
worldRemit was founded in 2009 and provides affordable money transfer services to emerging markets. It is worth more than $500 million.
Zopa was established in 2005. The company was the pioneer in peer-to-peer lending in the UK. Over $1 billion has been lent over the platform.
Although London is the world’s largest fintech hub, some people believe the city may lose its crown after Brexit. European cities likely to take that crown include Berlin, Amsterdam, and Dublin.
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