The financial technology sector is continuing to attract large amounts of investment well into 2015.
In 2014, the FinTech industry attracted more than $12 billion in investment. Today, the appetite for FinTech startups among venture capital funds continues to grow.
Europe enjoyed the most impressive growth rate, with FinTech investment rising 215 per cent to $1.48 billion in 2014, according to Accenture. Of all European countries it was the UK and Ireland that excelled, accounting for 42 per cent of European investment in the sector.
UK and Ireland
London is perhaps the world’s biggest FinTech hub, making the UK a prime destination for investment. The UK capital has four dedicated FinTech accelerators - Accenture, Barclays, Startupbootcamp and Dassault Systèmes - while UBS is opening a FinTech innovation lab at the Level39 accelerator space in Canary Wharf.
Twenty-four London companies made FinTechCity's Fintech50, a list of the 50 most important startups in the sector. TransferWise, Funding Circle, Nutmeg, Commuter Club, Osper, and Algomi are among the hotly-tipped firms.
Santiago Tenorio, director of Global Innovation and Partnerships at American Express, believes it’s an exciting time for anyone involved in FinTech in Europe.
“The startup community is innovating at an incredible rate, touching practically every corner of the financial services sector; from payments, to data and analytics; from core infrastructure, to consumer or enterprise services,” he explains.
“It’s hard to keep up with the flow of quality companies and bold, talented, entrepreneurs. The growing rate of VC activity and recent bets by top-tier Silicon Valley investors is an indication that the scene is hot.”
Ireland is also attracting money and talent. The country could see around 5,000 jobs created in its burgeoning FinTech sector, according to Deloitte, which notes that the sector can play an important role in helping larger companies to adapt and upgrade legacy systems.
David Dalton, head of financial services at Deloitte Ireland, told the Irish Times:
“While some financial services firms have been cautious about new FinTech start-ups, particularly where they are disrupting traditional business models and competing for customers, we are increasingly seeing a symbiotic relationship developing, which is helping to address these legacy issues in financial services companies.”
Europe - driven by the UK and Ireland - may be leading investment growth in FinTech, but that isn’t stopping the Asia-Pacific creating its own buzz, with Hong Kong perhaps the most predominant.
Financial secretary, John Tsang, recently called for ways to develop Hong Kong into a financial technology hub.
The government of Hong Kong has created a steering group to push forward innovation and investment in FinTech. Chaired by the secretary for financial services and the treasury, Professor K C Chan, it comprises a mix of members from industry, research and development institutions, government and regulators.
Professor Chan said: "FinTech can enhance operational efficiency and help foster new modes of development for the financial services industry. As an international financial centre with a highly developed information and communication technology sector, Hong Kong is an ideal place for developing FinTech.
"We will work closely with all stakeholders to look into the potential of the FinTech sector and possible measures to promote developments in this regard."
Last year, Accenture set up its first Asia Pacific FinTech Innovation Lab at Cyberport, where eight selected startups are being mentored in conjunction with 20 banks across Asia.
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