UK Fintech in Buoyant Mood Despite Brexit

Brexit doesn’t pose a threat to the UK’s position as a global fintech leader. That was one of the overriding messages from The Telegraph Future of Fintech conference, which brought together key stakeholders in government, fintech and the wider financial services sector.

Despite the uncertainty created by last year’s referendum and a faltering start to Brexit negotiations, senior fintech figures believe the industry will continue to thrive following the UK’s departure from the EU – whatever deal is struck. “The UK continues to be far ahead – it is still world class, along with New York and Singapore,” said Bindi Karia, an advisor to tech startups. “I sit on the advisory board of three fintechs right now, all of them London-based, and I can’t see them moving anywhere.”

Mariano Belinky, managing partner at Santander InnoVentures, added: “This is still a very healthy and thriving ecosystem. You have the right components from the point of view of funding, and it also gets a lot of support from other actors, which is something you don’t see in other fintech ecosystems.” 

With artificial intelligence (AI) a massive opportunity for fintech startups and investors like, Belinky went on to suggest that the UK has all the necessary ingredients for anyone looking to launch an AI-focused business. “The UK is a very good place for those companies,” he said. “You have great schools here, with the right talent, and you have banks as the customers for those ideas.”

This is still a very healthy and thriving ecosystem. You have the right components from the point of view of funding, and it also gets a lot of support from other actors, which is something you don’t see in other fintech ecosystems.

Mariano Belinky, Santander InnoVentures

Future challenges for UK fintech

However, despite the UK’s attractiveness to fintech startups, it can’t afford to rest on its laurels. As Karia pointed out, the likes of Frankfurt and Paris are emerging as possible contenders to London, while the Netherlands is looking to open up its financial services sector to new entrants. “A lot of markets in Europe are really looking to step up, particularly in light of Brexit,” said Karia.

Belinky also identified overseas competition as a challenge, revealing that the majority of startups currently catching Santander’s eye are based outside of the UK. “If you look at our portfolio, about half of the companies are in the US, about one third are in Israel, and the rest are in Europe, including the UK,” he commented. “So, there’s a question of whether [the UK] is giving companies the right focus on the idiosyncratic characteristics of this market, such that they become as attractive or as innovative as what we see in some other places.”

Blockchain is another area of concern for the UK, according to Reshma Sohoni, co-founder and managing partner of Seedcamp. It’s widely accepted that the technology – which powers digital currencies like bitcoin – has the potential to transform financial services. However, Sohoni suggested that the US is currently way ahead when it comes to harnessing it. “Blockchain is not well understood in the UK and Europe to the level it is being worked on and understood in the US,” she said. “We have a lot to catch up on.”

Fintech is here to stay 

Despite these challenges, the future of fintech seems to be secure, both in the UK and further afield. Contrary to what some believe, it looks like many of the companies that have sprung up in recent years will stand the test of time and won’t simply be acquired or copied by their larger counterparts. 

“If you look at the retail sector, you have a small number of giants, but then you’ve got a very healthy tail of other players,” said Imran Gulamhuseinwala, global fintech lead at EY and implementation trustee for the Open Banking Implementation Entity. “What financial services needs is a mid-market. That mid-market, at the moment, is the fintech market.”