With its fusion of high finance and high-tech, FinTech was always going to be a perfect fit for London’s economy. So is London the FinTech capital of Europe?
If the latest FinTech 50 list is anything to go by, London is the indisputable leader of Europe’s new finance sector.
The aim of the FinTech 50 is to identify the most innovative and disruptive brands in the financial services technology sector. Twenty-three of those to make the 2014 list operate from headquarters in London. They cover everything from global balance transfers to peer-to-peer lending, seed funding platforms to financial analytics. By contrast, the nearest rival, Stockholm, has just three FinTech firms listed.)
Of course it is worth noting that the panel which compiled the list did so on behalf of FinTechCity, an organisation which promotes London as a FinTech destination. But that doesn’t diminish the high number of fintech firms which are thriving in the capital.
Writing in Real Business, Michael Backes, co-founder of Liquid Labs, describes the fundamental role which the geography of London’s business districts is playing in the creation of a thriving fintech economy: “The flourishing tech scene around Old Street is in close proximity to one of the world’s leading financial centres. This has created an environment that no European city can yet match.”
Where is London’s FinTech scene?
So if London is the FinTech capital of Europe, where is the hub for this new breed of business? Will we find them in Shoreditch with all the tech startups or in London’s financial heartland, the City?
As we found with the Tech Track 100 last year, London’s tech firms are far more diversely distributed than we might expect – and just as likely to choose a business base outside traditional industry locations as within them. So far, it seems that a similar scenario is playing out among the city’s FinTech firms too.
Of the twenty-three London-based firms named in FinTech 50, nine are based in the City, including The Currency Cloud at Bishopsgate and Fixnetix on King William Street. The remainder – more than half – are scattered across many different locations in Central London.
Midtown, and particularly WC2, is so far proving the second most popular choice. Businesses based here include Borro on Chancery Lane and PensionsFirst in Long Acre, Covent Garden.
Meanwhile, TransferWise operates from offices in Shoreditch, Thunderhead.com from Soho and OpenGamma from the South Bank.
Wonga, on the other hand, recently announced a move which will see it consolidate staff from its two offices onto a single site in Camden. This places it just two minutes by tube from Euston – a location which is proving increasingly popular with large tech firms.
Digital Shadows, which is based on Canada Square, is the only FinTech 50 firm based in Canary Wharf.
However, as the FinTech sector continues to evolve, a number of specialist accelerator programmes are launching in London. As a result, the next wave of FinTech startups may begin to cluster around these.
To date, there are three major FinTech accelerators in London. The first of these, FinTech Innovation Lab, offers participants workspace in the financial services district. TechStars London – the first TechStars location outside the US – is based just off the Clerkenwell Road. The latest FinTech accelerator to land in London – startupbootcamp – will provide participating businesses with office space at St Katharine Docks near Tower Bridge, a riverside estate in the heart of the City.
But it is still early days for this fledgling sector, although experts are predicting that 2014 will be the breakout year. As the FinTech industry continues to take shape, we’ll begin to see a clearer picture of how it fits into the London business landscape, and how London in turn fits into the wider European FinTech scene.
Do you agree? Is London the FinTech capital of Europe? How can we continue to grow our FinTech sector?