The capitalâ€™s booming financial technology sector is being driven by record levels of investment and the rapid adoption of FinTech products by young and wealthy internet users, according to new research compiled by London & Partners and EY.
Venture capital investment in London FinTech climbed from Â£24 million in the whole of 2010 to Â£312 million in the first six months of this year alone. Over the last 10 years London has attracted 1,000 international tech investment projects â€“ more than any other city or country in Europe.
Affluent young Brits are also adopting new FinTech products at a rapid rate, the research found. In the last six months, 35 per cent of the UKâ€™s online population used at least one FinTech product, and peopleâ€™s usage increased in line with their income. The highest rate of FinTech use was among those aged between 25 and 44 and earning over Â£50,000. An additional 8 per cent of the UKâ€™s online population is expected to start using FinTech products over the next 12 months, in particular online payments and investment products, the study noted.
Imran Gulamhuseinwala, EYâ€™s head of FinTech in EMEIA, said: â€œAt approximately Â£20 billion of revenues, the UK has a world leading FinTech footprint. Crucially we estimate that as much as 20 per cent is generated from the high growth â€˜emergentâ€™ FinTech segment including online payments, online security and marketplace lending. Our analysis found that the UK is a very attractive location for FinTech startups, and that international FinTech startups founded outside of the UK often move here to use the UK market as a platform for internationalisation. We think thereâ€™s potential for the UK FinTech industry to generate an additional Â£16 billion of revenues by 2020.â€
The new figures have been released to coincide with a three-day trade mission to Japan, led by London Mayor Boris Johnson. The trip aims to foster collaboration and investment links between London and Japan ahead of the 2020 Tokyo Olympics.