Across Europe, the UK currently dominates as the top destination for fintech investment. The capital boasts over 1,000 fintech headquarters, including Monzo, TransferWise, Oak North, Checkout.com, Funding Circle, Sumup, World Remit, WorldPay and Finastra – the list is endless. London is at the forefront of disruptive finance innovations, supported by regional tech hubs such as Manchester, Bristol, Belfast, Cambridge and Edinburgh. Katie Fisher reports.


Some may claim that the likes of San Francisco, Singapore or Zurich have overtaken the UK capital’s fintech scene. But these fierce rivals lag behind in terms of direct investment, nurturing environment and history of financial services. London’s fintech hub is an ecosystem alive with tech cross-pollination and partnerships. With disruptive emerging startups working next-door to tech-giants like Google, the opportunity for business association and knowledge-sharing is second to none. There is no denying that London continues to be a global fintech incubator rife with investment, innovation and growth.



The COVID-19 pandemic has caused chaos across the globe but provided a window of opportunity for fintech companies. Could the coronavirus affirm London’s position as a global fintech hub?



Financial veteran Anne Boden certainly seems to think so. The Starling CEO states “The biggest challengers to London are Berlin and Paris, but I don’t think they have enough fintech-traction to take the lead away from London at the moment”. Boden also points towards the 2008 financial crisis in having a role in creating the diverse and intensely competitive fintech market we’ve come to know. She believes the coronavirus will not hinder this position but rather “help London make the most of its lead”. 


The resilience of the capital’s tech scene is undeniable. Born out of the ashes of the financial crisis, it has gone from strength to strength, and Brexit was not going to halt this. Atomico’s report showed the industry attracted over £9 billion in 2019, compared to the £5.2 billion after the referendum. While challenges continue to arise, there is no slowing the fast-developing sector and coronavirus was not going to be the exception. Instead, the crisis is sure to affirm London’s position on the fintech ladder. 


The recent economic upheaval has also brought about predictions of an accelerated end to cash and bank branches. Social trends have been altered in an unprecedented way, perhaps leading to the ultimate demise of physical cash. Quarantine and social distancing are having irreversible effects on consumer habits. With the UK Government actively encouraging online retail, E-commerce is soon to make up 40% of all retail sales, and the use of digital payments has spiked.


Research from ATM network provider Link UK shows that there will be a long-lasting impact on the use of cash in the UK. 72% of people say that the coronavirus will affect their future use of cash, with 44% of consumers expecting to increase their use of contactless and digital payments over the next six months. Due to the contact risk of spreading Covid-19, it is currently advised not to use cash where possible. Slowly but surely, withdrawing money from an ATM begins to seem a thing of the past. 

It might be assumed that this casts a shadow for fintech firms who rely on this form of currency and are currently struggling through the slowdown. However, the adaptations call to a new potential customer base which will thrive in the scene of challenger banking platforms and financial services with which London overflows.


With customers stuck at home, challenger banks and finance apps have stepped up to offer their services. Challenger banks are bound to flourish, and it seems the days of the high street bank branch are numbered. Digital banking is becoming increasingly popular due to its ease of use and accessibility, and the appeal of taking time to visit a branch to manage your finances has withered away. London’s Fintech market is overflowing with challenger banks; Monzo, Starling Bank, Revolut, Amiaz, BAAB, Bofin, Equals, Griffin, LQID and MoneeMint are just some of the names making headlines with their innovative finance technologies.


Frank Zhou, CEO & Founder of London-based mobile fintech Zeux, the payments, banking and investment app, highlights the ‘silver lining’ of the pandemic. “We see a potential for a faster pace to a cashless society and the increasing opportunity for digital payments”. 


Fintech entrepreneur Matthias Kröner, a highly respected thought leader within the global financial services community, speaks of this consolidation. “It is an evolutionary moment and is accelerating the fintech industry, which could see companies move into new business lines…Covid-19 could accelerate the arrival of the next iteration of the fintech industry. This does not mean it is going to be easy, but the sentiment is that even the last company to wake up on digitisation will invest.” Kröner also points out the effects on consumers approach to digital services: “Due to new ways of working and living changing during the pandemic, digital living is not a myth any more. Even people who had never done a video conference before now know Zoom”. 


Russ Shaw, the founder of tech startup network Tech London Advocates, views a similar outcome stating: “When we come out of this, we will see a huge spike in digital payment platforms.” Despite the downturn in investment funds, there is a future in which the current struggles are no more than an instrumental stepping stone to the new age of the fintech industry. 


London’s tech field has overcome an array of challenges to cement its global position, and for fast-developing fintechs, there is no better network of expertise and talent. The present difficulties may significantly burden early-stage companies that are reliant on capital investments, but they also provide an invaluable opportunity for the digital and tech world. Digital finance services will become more mainstream, making the sector stronger than ever coming out the other side of the pandemic. In defiance of the challenges posed, London’s position as a fintech hub remains secure and undoubtedly will continue to be so.