Fintech companies are fundamentally changing how the financial services ecosystem operates, giving its customers powerful new tools to help with savings, budgeting, investing, insurance, electronic payments etc. The industry is growing rapidly, filling gaps where traditional banks and financial institutions have failed to meet customer needs.
The good news is that the UK is still the top destination for European fintech (it always has been), with investment reaching a new record of $4.9bn last year, up 38% on the previous year, according to Innovate Finance.
The firm released its 2019 FinTech Investment Landscape report at the end of January, which revealed that fintech investment in the UK was almost four times the amount Germany received in second place at $1.3bn, and six times more than Sweden in third at $778m.
However, outside of Europe, the UK came second to the US, which netted $16.3bn across 1,095 deals. India came in third place with $3.9bn for fintech start-ups, while China dropped to fourth place at $1.8bn after suffering a 93% decrease year-on-year. As a result of the decline in China, global fintech investment dropped 28% to $35.7bn. Investment in Asia fell 73%, while all other regions reported an increase.
British fintech firms represented seven of the top 10 largest deals in Europe last year and total investment in the UK fintech sector was 30% higher than the top 10 European countries combined.
“It’s immensely encouraging to see the year-on-year growth in investment figures that the key areas of the global fintech industry are attracting and we should be proud of the unique position the UK has carved out on an international level,” said Charlotte Crosswell, chief executive of Innovate Finance. She added: “We are a world-leading fintech hub and as the figures reveal, the epicentre of fintech in Europe – all of which is a testament to the fact that the UK is a leading destination to start and scale a fintech business.”