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.

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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.     1. Hedge funds (£350 BN)
2.     2. Private equity funds (£420 BN)
3.     3. Commercial property management (£520 BN)
4.     4. Discretionary private client management (£665 BN)
5.     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.