There’s been a lot buzz around the growing financial technology sector and its ever increasing role as a disruptor of traditional banks.
Now that the dust has settled and fintech and secured its place as a major industry, people are now asking which region boasts the most innovation and influence. The position of top dog is up for debate and the usual candidates of New York and Silicon Valley are often mentioned.
But a familiar player is gaining attention in the heart of Britain. London has been gaining attention and funding over the past several years and is a potential contender for the top spot.
Earlier this month, total investment into London’s fintech scene reached $554 million, surpassing the $487 million of total investment in 2014. Much of the additional funding came in the form of record breaking capital raising rounds, including Funding Circle’s £150m IPO.
London-based startups like Funding Circle have received attention from both the US and the rest of Europe, supporting the claim that London is the fintech capital. Britain alone has received close to $5.4bn in fintech funding since 2010 whereas the entirety of Europe has received only $4.4bn.
However, fintech investment in the US completely dwarfs not only the UK and Europe, but the entire world combined, coming in at $31.6bn in total.
Despite the disproportionate amount of investment in the US, many key players are still touting London as the fintech capital of the world. Eileen Burbidge, an American tech pioneer and founder of a top London VC firm, has boasted of the UK’s success in the fintech sector and claims “London has conquered Silicon Valley”. Burbidge says London is already leading the current fintech cycle and will continue to stay ahead of the game.
She noted that London has the advantage of combining traditional banks, tech startups and government institutions all into one city, whereas their American counterparts are spread out in Silicon Valley, New York and Washington DC.
She emphasized the role that the UK government is playing in London’s fintech scene. “Here we have roundtables, we have an envoy who’s actually within the investment community talking to startups and also talking to Number 10 and 11,” she said. Although London may current lead the current fintech cycle, the coming cycle, which will focus on backend support, security and technology advancements, is still up for grabs.
Considering the funding and technology advantage of the US, it remains unclear if London can stay on top for long.