The FinTech sector continues to grow with revenue increasing by 7.5%
Despite the challenging outlook for the economy with Brexit approaching, revenue generated by the FinTech sector is expected to have risen by 7.5% in 2019, reaching £9.9 billion. By 2025, revenue for the sector is expected to reach £14 billion, a compound annual growth rate of 7.1%.
Gerald Edelman’s latest report delves into this rapidly growing sector, focusing on industry trends, M&A activity, FinTech unicorns, threats to the sector and an overall outlook for the coming years.
Key takeaways from the report are:
- The UK Government committed over £500 million to the sector through the British Business Bank in 2019, recognising the FinTech industry as a key area for future economic growth.
- The UK has one of the highest FinTech adoption rates with 42% of adults active on at least one FinTech product, compared to the global average of 33%.
- Globally, M&A in the sector has been declining. Despite this, the UK has maintained its growth, with investors supporting any size of business, from start-ups to established FinTech companies.
- London is now the world leader in FinTech unicorns, housing 18 companies with valuations of more than $1 billion, overtaking the previous leader, San Francisco.
- 30% of UK FinTech workers come from overseas, which means Brexit could have a detrimental impact on the supply of specialist employees.
Carl Lundberg, partner of Gerald Edelman, said, “FinTech is forcing financial institutions to rethink and modernise their services and strategies to compete with new innovations. Younger generations are driving the growth of the sector; as they are more reliant on smartphones, the demand for digital banking and asset management, for example, has risen dramatically and FinTech companies are quickly responding, creating pioneering new services that traditional banks do not offer. This has yielded large investments, facilitating industry growth.
Although the sector has been largely successful, FinTech companies will have to contend with the consequences of Brexit; 30% of FinTech workers and a majority of investors in 2019 came from overseas, and the UK’s departure could jeopardise access to these resources.”
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