The UK and Ireland are the fastest growing markets in financial technology (fintech) investments globally, with annual investment growth in the markets in 2013 almost double that of the global average.
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Boris Johnson, Mayor of London |
Management consultancy firm Accenture said the annualised growth rate for financial technology investment in the UK and Ireland was 51 per cent in 2013, compared to average global growth of 26 per cent, and a 23 per cent rise in Silicon Valley. Investments in the UK and Ireland between 2008 and 2013 totalled $265 million (€192 million), and the area accounts for 53 per cent of all investment in Europe.
Julian Skan, Accenture managing director who oversees the FinTech Innovation Lab London, noted much of the growth in the UK and Ireland is being generated in London, due to the city's strong financial services sector, and investment schemes for tech company start-ups.
"The fintech boom is a huge opportunity for London with its well-developed financial and technology industries," Skan said, adding: "It is also crucial to London maintaining its position as the leading global financial center because of the growing importance of technology to the financial industry."
Although Accenture named the UK and Ireland as the fastest-growing markets, the consultancy noted the financial technology sector in the region is still in its infancy relative to established areas including Silicon Valley. Total investment in the UK and Ireland since 2004 hit $781 million, compared to $950 million in funding to Silicon Valley companies in 2013 alone.
Accenture's study revealed the U.S. is still the top market for financial technology investments, and that total global investment hit $2.97 billion in 2013 compared to $928 million in 2008.
Skan said it is still "harder to raise funding" in the UK and Ireland than mature markets like the U.S., despite a "growing number of incubators and accelerators" in the two former markets.
UK press reports this week pointed to another problem for London's financial technology sector--a lack of suitable companies.
The Guardian reported that a high-profile funding scheme backed by London Mayor Boris Johnson and the Tech City Investment Organisation has been quietly ditched after no suitable companies were found for a £1 million (€1.1 million/$1.6 million) prize pot.
A spokesman for Digital Shoreditch, which was helping to run the programme, told the newspaper it had proved hard to find companies that were ready to receive the six-figure investment.
The Guardian report came less than a fortnight after Johnson said London is unrivalled in the opportunities it offers tech firms at the launch of a programme to champion the city's credentials in the field.
"[W]e have the talent, the investors, and the entrepreneurial spirit," Johnson stated, adding that his goal is to "champion London as the global leader for ambitious tech companies."
Digital Shoreditch 2014, a festival designed to highlight the tech prowess of the Shoreditch region of London, has also been abandoned. In a statement, Digital Shoreditch explained the decision was based on a desire to "focus our attention onto bringing new perspectives into the mix," and to "create completely new types of events and competitions."
For more:
- see the Accenture release
- read the Guardian's article
- see this Digital Shoreditch statement
- read the Mayor of London's announcement
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