As innovation and cutting-edge technology have transformed financial services in the last decade, London’s status as a leading financial centre has meant the UK capital has emerged as a global hub for fintech innovation. In fact, 2019 saw record levels of investment into the UK fintech sector, with London being internationally recognised as a destination that provides the right environment and support for fintech companies to thrive and scale their businesses.
Now that the global pandemic has brought the world to a standstill with lockdowns mandating restricted movement, fintech has been put to the test. So how has London’s fintech scene fared?
Firstly, people are moving en masse to digital platforms and fintech provides a solution. London fintechs like Revolut and Monzo are making it easier for people to sign up and open accounts online, whilst Starling Bank has launched a new Connected Card for customers to give to trusted friends to pay for essentials during the pandemic.
One major draw for global fintech talent to London is access to capital, with the UK capital’s tech companies attracting $9.7bn in funding last year – more than any other European city. Apart from fintech, these deals also fueled a surge in some of London’s other sectors like AI, deep tech, and cleantech.
A report released last week showed that investor confidence in London’s fintech sector looks set to continue. Figures revealed that London’s fintechs received 80% of total fintech funding coming into Europe in Q1 this year and generated almost as much investment as they did for the whole of 2017. Amongst these deals, were two of London’s most successful fintechs, Revolut and Onfido, receiving $500m and $100m in Series D funding respectively.
Entrepreneurs are also attracted to London’s fintech community that boasts a thriving ecosystem with world-class expertise in tech and finance. The strength of the ecosystem is evident in how London’s businesses have responded to coronavirus, demonstrating resilience and innovation as they have adapted to support local communities.
One of London’s fintechs, CreditEnable who have an office in Mumbai have decided to ramp up their activities in India in response to the coronavirus, demonstrating the longstanding and continuing business links between London and India. They have launched a new initiative called We Move Forward, offering Free Business health Checks to SMEs.
London’s recognition as a global tech hub also provides a landscape for ambitious international companies to succeed. Favourable R&D tax credits and one of the world’s most competitive corporation tax rates make London a top destination for Indian companies looking to grow in the international markets.
Both the UK and India are home to a number of unicorn companies, with the UK producing more than twice the total number of $1bn tech companies than any other country in Europe last year, and sitting behind only the US and China when it comes to building the world’s fastest-growing firms. India is home to 24 unicorns, including success stories like Zomato, Swiggy, Ola, Oyo, Makemytrip. In fact, Oyo and Ola entered the UK market and set up in London last year.
Alongside its startup-friendly ecosystem and access to VC funding, Indian companies also benefit from London’s favourable time zone which allows companies to do business all over the world in the same day. It is these combined strengths that attract fintech talent from across the world to choose London as their launchpad to expand their business in international markets.
*The Author is: Chief Representative India at London & Partners