UK’s fintech sector hots up – and not just in London
Beyond the capital, northern tech clusters are starting to make their own mark on the fintech startup scene.
The UK holds 33 of the spots on the FinTech50 list of most innovative firms in Europe. What happens in the wake of Brexit, however, remains to be seen.
British fintech firms have dominated this year’s FinTech50, with 33 of the 50 chosen companies based in and around London.
The strong presence of British firms on the list cements London’s position as the world’s leading financial technology centre. That position may be under threat from the repercussions of Brexit, but for now, London’s access to talent, regulatory environment, availability of capital and end-client demand are keeping the city on top.
Here are just some of the list’s highlights.
Monzo is a digital, mobile-only bank that operates through a mobile app and a prepaid debit card. In 2016, it reached 200,000 users and had £250 million spent on its cards. It currently holds a limited banking licence, which is what allows it to support the prepaid Mastercards. But founder and CEO Tom Blomfield expects the limits to be lifted soon, allowing the bank to start offering ordinary current accounts.
Atom Bank is a couple of steps ahead of Monzo, in that it already holds a full unrestricted licence for personal and business banking services, and offers a range of products that include digital mortgages and secured business lending.
Atom is actually based in Durham, not London, and is rated by KPMG as one of the top 10 companies using technology to drive disruption in the financial services industry.
Digital Shadows was founded in 2011 and closed a $14 million funding round in February of last year. The company’s flagship product is SearchLight, a continuous real-time scan of over 100 million data sources online and in the dark web, cross-referencing for customer-specific data to locate when information has been inadvertently posted online or a data breach has occurred. It also monitors any hacker chatter for references to the company that imply upcoming threats.
Privitar describes itself as a “leading privacy engineering company”. Its goal is to help companies get the most out of data while ensuring the utmost confidentiality. Through its software, organisations can use, share and analyse data for insights safely, while protecting customer privacy – a paramount concern for financial firms both in terms of their brand and to keep in step with regulatory requirements.
Featurespace uses adaptive behavioural analytics technology, based on Bayesian statistics and research undertaken at Cambridge University, to allow real-time tracking of group and individual behaviour. Taking the huge amounts of customer interaction data that companies collect, the proprietary algorithms can develop insights that are used to detect and prevent fraud and also to help with targeted marketing to stop customer churn.
Algomi has created a bond information network known as Honeycomb that securely and intelligently harnesses big data to link buy-side firms to dealers that match their bond orders. In the best disruptive fashion, Algomi uses technology to link up buyers and sellers in a new way. In March of this year, it announced a $10 million strategic investment from Euronext, which will enable corporate bond traders to access the network on a global basis.
Industry experts, venture capitalists, startup founders and European politicians choose the most innovative firms for the FinTech50, and Britain is leading that innovation. What happens in the wake of Brexit, however, remains to be seen.