We’re joining forces with FinTech and investment centres around the world.
The UK remains one of the largest and most diverse centres of investment management in the world. It is second only to the US and remains the largest centre for investment management in Europe.
London has been a key driver in the UK’s FinTech success story. As the second highest ranking FinTech ecosystem globally, it has the world’s highest concentration of financial and professional services firms.
However the UK fintech success story is not confined to London, but
spread across the UK in ‘clusters’, notably where financial services and technology domain expertise, STEM skills/academia and investment capital are present, there are emerging clusters in Manchester, Leeds and Birmingham in particular.
To support fintech firms to scale up, the Financial Conduct Authority (FCA) will take forward a ‘scale box’ – a package of measures to enhance its pioneering regulatory sandbox, which has been invaluable for allowing start-ups to test new propositions, and to provide a one-stop shop for growth stage firms.
It will also launch the second phase of its Digital Sandbox to enable firms to test concepts that tackle sustainability and climate change-related challenges, helping to deliver a greener financial sector that supports the transition to net zero.
The Chancellor also backed the creation of an industry-led Centre for Finance, Innovation and Technology (CFIT) and committed to work with regional and national fintech bodies to make it a reality. The CFIT would work closely with the regional hubs to identify and address sector challenges in support of fintech growth across the UK.
Key firms in the UK Fintech space can be found in the IA Engine membership. We work with 150+ FinTech firms and partners across the investment value chain to open up tech-driven possibilities and solve the challenges faced by investment firms, both big and small.
Click below to access our Member Directory:
The UK’s 2,500 FinTechs are made up of 23 different specialisms, which aggregate up into 8 broad categories – banking, RegTech, InsurTech, lending, payments, WealthTech, quote aggregators and accounting, auditing and cashflow management.
The UK overall has clear strengths in WealthTech (including PFM and cryptocurrencies) and payment technology, accounting for more than 50% of all UK FinTechs. The WealthTech specialism is driven primarily from London, where 77% of WealthTech businesses are based, alongside a strong cluster in Scotland. Payments businesses make up 17% of UK FinTechs and around half are clustered in London with a strong presence in the Pennines cluster and Scotland.
Total UK managed assets under management (AUM) reached £8.8 trillion in 2023.
Total assets in UK managed investment funds reached £4.2 trillion at the end of 2023. The majority (78%) of these assets sat within funds domiciled overseas.
The UK investment management industry supports approximately 126,400 jobs.
The majority of investment management activity takes place in the City of London, but Edinburgh is the second largest hub for investment management in the UK.
Investment Association members represent the majority of the UK investment management industry in asset terms (85%) with a combined AUM of £8.8 trillion. Firms outside of the IA membership can be broadly split into five categories which have been noted below alongside their AUM.
- 1. Hedge funds (£350 BN)
- 2. Private equity funds (£420 BN)
- 3. Commercial property management (£520 BN)
- 4. Discretionary private client management (£665 BN)
- 5. A small number of dedicated ETF operators (£430 BN)
Find out more in the Investment Associations Investment Management Survey found here.
London is one of the top three FinTech hubs in the world and approximately two-thirds of all UK FinTechs are headquartered there.As a super hub, London’s success is catching. It has helped establish and support a halo of FinTech activity around Greater London, the South and the South East of England, in areas such as Milton Keynes, Oxford, Brighton, Southampton and Bournemouth. A number of these areas are developing into emerging clusters, such as Reading and Cambridge. With regards to specialisms, it is strong across the board, especially in Banking, Payments & WealthTech.
The Pennines includes Manchester and Leeds. To date, this cluster may not have received the recognition its scale and activity deserves. This cluster, with over 135 FinTechs, has the highest count of FinTech companies outside of London, with 7% of scaleup FinTechs nationally being headquartered here. Specialisms include Lending, Payments & RegTech.
Scotland, predominantly the Edinburgh – Glasgow corridor, is another example of an established cluster that is better known nationally and internationally and it hosts the third largest volume of FinTechs within the UK. It has strong roots in financial services with many large financial institutions such as The NatWest Group and Aberdeen Standard Life choosing Scotland as its HQ. Edinburgh University, as a world leader in AI, supplies a rich pipeline of data skills and talent. The focus of specialisms issimilar to London, with a large focus on WealthTech and payments.
Birmingham also qualifies as an established cluster with a significant financial services presence, one example being HSBC’s recent relocation of its UK Retail Banking Head Office from London. However, given Birmingham’s size and status as the UK’s second city, together with the many potential ecosystem contributors, there is a sense that there is a lot more yet to emerge from this cluster. Birmingham’s specialisms include lending, layments & banking.
There are six additional emerging clusters across the UK which, though smaller than their established counterparts, show exciting potential to grow or are already featuring a specialist FinTech focus. These are Bristol & Bath, Cambridge, Newcastle & Durham, Northern Ireland, Reading & West of London, and Wales.
Market News & Updates
The economy of the United Kingdom is a highly developed social market and market-orientated economy. It is the fifth-largest national economy in the world measured by nominal gross domestic product (GDP), ninth-largest by purchasing power parity (PPP), and twenty first-largest by GDP per capita, constituting 3.3% of world GDP.
Total UK managed assets under management (AUM) reached £8.8 trillion in 2023.
Almost half (44%) of total assets managed in the UK are managed on behalf of overseas clients. European clients continue to account for the majority (58%) of overseas client assets.
The IA Engine is boosting the industry’s adoption of new technologies and helping investment managers to identify new investment opportunities, work more efficiently and cut costs, ultimately benefiting customers.
In the UK companies are able to claim tax relief for their R&D activity. These government schemes are designed to boost innovation by supporting businesses who seek to improve or overcome challenges and uncertainties in their products and processes: https://www.govgrant.co.uk/rd-tax-credits/sector/technology/fintech-tax-relief/
The UK government offers two attractive tax breaks known as SEIS and EIS (the ‘Seed Enterprise Investment Scheme’; and its parent the ‘Enterprise Investment Scheme’) as a means of offsetting the risk of investing in startup companies for investors: https://www.seedtribe.com/seis-eis-tax-breaks
Population: 67.33 million
Currency: Great British Pound (GBP)
Political System: Constitutional monarchy
Legal System: A common law system which combines the passing of legislation but also the creation of precedents through case law.
Engine’s mission is simple: To fuel the adoption of technology within investment management, for the benefit and changing needs of clients.
We’re working with 140+ FinTech firms and partners across the investment value chain to open up tech-driven possibilities and solve the challenges faced by investment firms, both big and small.