Fintech in the UK: An introduction to Europe’s fintech capital

Long known as a global hub for financial services, the UK has in recent years shown its strengths in financial technology too. Today, it’s widely recognised as having the largest fintech sector in Europe, as well as a startup ecosystem worth over $1.1 trillion. 

So, how did the UK reach this preeminent position? What are some of the strengths of the UK’s fintech sector? And why should you consider working with British fintechs, or moving your own startup to the UK?

I’m the CCO of Tenity, the open innovation accelerator and ecosystem for financial services. I’m based in London and, based on my experience, I share the answers to some of these questions. I cover:

• Key data about fintech in the UK
• The history of fintech in the UK
• Three factors that make the UK a great place for fintech
• The future of fintech in the UK
• Six well-known fintech startups in the UK
• Tenity’s role in the UK fintech ecosystem

Interested in working or partnering with British fintechs? Reach out to us. 

Key data about fintech in the UK

As an introduction to the local scene, let’s kick off with some statistics about fintech companies in the UK. 

As of June 2024, the UK is home to 52 of Europe’s 121 fintech unicorns. This compares to just 13 in France and 12 in the Netherlands, according to Dealroom. It means that the UK produces four times as many unicorns as any other European country. 

Other data from Dealroom shows the strength of the local startup sector:

• The UK startup ecosystem is worth over $1.1 trillion. It’s the third most valuable startup ecosystem in the world, ranked by VC investment.
• The UK is home to over 150 unicorns overall (a third of which are in fintech), as well as over 25,000 funded startups. Fintech is the UK’s most funded startup sector.
• The UK receives 40% of Europe’s venture capital, and Greater London receives 70% of the UK’s total.

Statistics from KPMG show a similar story: 

• British fintechs receive more funding than those in France, Germany, China, India, Brazil, and Canada combined, according to a KPMG report.
• While fintech investment in 2023 dropped by 34%, to a total of £9.75 billion, the UK remained the European leader.
• Europe’s largest fintech deal in 2023 was the £5.47 billion private equity raise by UK-based Finastra. 

While London remains the obvious hub, the whole of the UK is innovating in fintech. A third of all UK fintechs are now based outside of London. And investment there is growing. According to Fintech Wales, for instance, investment into Welsh fintechs has increased by 300% since 2022. 

Finally, what are the UK’s specific strengths when it comes to fintech? 

• London is ranked first in the world for sustainable finance, according to the Global Green Finance index.
• Wealthtech made up 37% of UK fintechs, according to Deloitte in 2021.
• Payments was the second largest niche, accounting for 19% of fintechs. 
• These were followed by significant numbers in lending, regtech, and banking too. 

The history of fintech in the UK

The strength of the UK in the financial sector is born out of the country’s role as a financial services centre. London has been a centre of finance since the 17th century and today still vies with New York as the predominant global financial hub.

As of 2023, the UK was still the world’s largest net exporter of financial services. These services make up a substantial part of the British economy. According to the City of London, in 2023, the UK’s financial and professional services industry contributed a record £110.2 billion in tax, the equivalent of 12.3% of the UK’s total tax income. 

But what were the conditions that allowed fintech—and financial innovation more generally—to flourish in the UK?

In 2008, the financial crisis introduced two factors that laid the ground for fintech’s growth:

• Firstly, there was a crisis of public trust in established banks and financial institutions. People saw them as two big and powerful and became aware that they weren’t always acting ethically. 
• Secondly, in response to the crisis, new regulation was introduced that encouraged innovation and that supported financial challengers. 

In the years that followed, the UK saw a remarkable increase in digital banking and data-driven financial initiatives too. In 2015, for example, Atom, the first digital-only bank, was launched. And throughout the 2010s, open banking gathered pace, as an initiative to help financial services become more accessible to consumers overall.

The UK’s first fintech unicorns grew out of this context. In 2010, immediately after the crisis, Funding Circle was set up as a peer-to-peer lending marketplace that allowed anyone to invest in small-to-medium enterprises. It became a unicorn in 2017. 

Then came the likes of Revolut and Monzo. Monzo enjoyed the “fastest funding round in history” by raising £1 million in 96 seconds through the crowdfunding platform, Crowdcube. 

All of this has built the UK into Europe’s biggest fintech hub, as well as one of the most exciting startup ecosystems on the planet. 

Three factors that make the UK a great place for fintech

The UK—particularly its capital, London—has truly one of the most vibrant fintech scenes in the world. 

In this section, I explore three reasons why you should get involved, whether as a startup looking to relocate, an investor, or a corporate seeking to partner with a local fintech. 

1. The UK is a globally significant hub of wealth and investment

You can see from the statistics above the sheer volume of investment that UK fintechs enjoy. The country ranks third globally for total fintech investment, attracting more than Germany, France, and China combined. 

But the UK’s strength is that it’s not just fintech that the country excels in. Part of its appeal to international investors and businesspeople is the diversity and strength of its financial and banking services and startup scene overall. 

London is the headquarters of some of the world’s largest banks, for instance, including HSBC, Lloyds, and Barclays. Plus, it’s an historic leader as a destination for family offices, named as a top-four city in the world by Forbes.

Not to be underestimated is the sheer amount of private wealth in the UK too. London has 220,000 millionaires and there are believed to be nearly three million millionaires across the country. For fintechs, this offers a lot of potential for local investment. 

2. London is an attractive and diverse city, with a high rate of fintech adoption among the local population

According to Global Finance in 2022, London has the highest quality of life in the world. It’s one of the most diverse cities on the planet, with over 300 languages spoken, and it has some of the best universities globally too. 

If you’re looking for an exciting place to live with diverse local talent, the UK’s capital is hard to beat. That’s true even after Brexit, as London remains an attractive destination for European and international expats too. 

For fintechs, the UK also has the benefit of having a population that’s well-educated and tech savvy. In 2019, the UK had an overall fintech adoption rate of 71%, compared to a global average of 64%, according to EY. Since then, with the growth of the likes of Revolut, Monzo, and Starling Bank, that’s likely to have increased further. 

Overall, the UK is both a fantastic place to find employees and a large market for fintech products. 

3. The UK boasts a strong and supportive fintech community

The UK’s strengths in fintech mean that there’s a very well-established ecosystem that you can tap into. What’s more, it’s an ecosystem that’s supported by the government and regulators like the Financial Conduct Authority (FCA). 

The 52 fintech unicorns that are already in the UK form the backbone of the local industry. In 2024, for instance, there was news that Innovate Finance was launching the Unicorn Council for Fintech to advise the UK government. Aside from providing the basis of the fintech community, these unicorns are a consistent source of local expertise and creativity. 

For instance, 17 startups have been founded by Monzo employees, according to Sifted. Meanwhile, 34 Revolut employees have gone on to found startups too, causing Michael Bodansky, Revolut’s global head of corporate communications, to call Revolut a “training ground” for talent. 

But the local fintech community extends beyond the fintech sector specifically. London has the benefit of being a place where global banks, investors, and entrepreneurs rub shoulders with regulators and politicians. It means that the network of expertise is there to help you grow.

The future of fintech in the UK

While there has been uncertainty about the UK economy in recent years, one place where there is still substantial growth is fintech. UK investment in fintech firms may have dropped in 2023 in line with global trends, but analysts still forecast a 10% CAGR until 2029.

Fintech innovation is recognised as a critical part of the UK economy by the government, including after the 2024 election. The government is supportive of the fintech ecosystem and frequently publishes studies of the scene, such as the 2021 Kalifa Review of UK Fintech. Going forward, two areas of particular government support will be in Artificial Intelligence and open banking. 

Plus, other parts of the United Kingdom outside of London are growing their fintech scenes too. Currently, the most important regions outside London are the Scottish cities of Glasgow and Edinburgh, as well as Manchester in England. VC investment in Glasgow’s fintech scene, for instance, has grown by 500% since 2019, and we’ve seen how the Welsh capital has tripled its investment too. 

Overall, this means that, across the UK as well as in London, there are positive signs of continued growth. 

Six well-known fintech startups in the UK

With over 50 fintech unicorns in the UK, there are many well-known companies in the space. Here are just a handle of the best known:

• Funding Circle. A peer-to-peer payment and lending marketplace. It became the UK’s first fintech unicorn in 2017.
• Monzo. An app-based challenger bank that enjoyed the fastest funding round in history, raising £1 million in just 96 seconds. It’s now valued at $5.2 billion.
• Revolut. Now named as the UK’s most valuable fintech, it’s valued at $45 billion. 
• Checkout.com, another major fintech providing payment services, is valued at $40 billion.
• GoCardless. One of the UK’s strengths is payments, and GoCardless is another success story. 
• TrueLayer. One of Europe’s leading open banking platforms.

Tenity’s role in the UK fintech ecosystem

Tenity started as an open innovation platform at SIX, the Swiss Stock Exchange. Since 2016, we’ve run custom innovation programmes for corporates, alongside our own accelerators. Throughout this time, we’ve been entirely focused on fintech and financial services. 

In 2024, Tenity acquired Hackquarters, the startup accelerator based in Istanbul and London. Now, to facilitate innovation in the local financial services industry, we perform three main tasks.

1. We act as matchmakers between startups and financial corporates

We were born as a platform to connect financial corporates with the specific startups that could solve their innovation challenges. And to this day, building relationships between startups and corporates is one of our central priorities. 

In practice, this typically takes two forms:

• We run accelerator programmes on behalf of financial corporates. We curate custom programmes tailored to the specific needs of particular corporates. For example, in London, we’re working with Ripple to create an accelerator program specifically for startups building solutions on XRPL.
  
  
• We run our own startup accelerators and events. Alongside programs organised on behalf of corporates, we run our own accelerators across Europe and Asia. While we don’t have any in London at this time, UK startups are welcome at any of our European programmes. 

Whatever we do, we focus entirely on fintech and the financial industry. That means you can trust our unmatched industry expertise. 

2. We give startups access to global expertise and markets

There are many accelerators for fintechs and other startups in London, such as Barclays’s Eagle Labs. Most focus on providing investment, but very few offer startups access to the global industry expertise that we can. 

At Tenity, we have hubs across the world, in Singapore, Switzerland, Spain, the Baltics, and the Middle East. This gives us a network of mentors, experts, investors, providers and corporates that is truly global. Each of our hubs is also connected to local talent and they have their fingers on the pulse of local trends.

Even more importantly, we can help you grow into these global markets too. If you want to reach an Asian market, for instance, we can help your startup use our Singapore hub as a springboard for regional growth. We have expertise that can help you with licencing, local regulation, and more. 

So, working with Tenity is not just about investment—but about access to a global network to support your growth too. 

3. We help corporates innovate and invest in fintech startups 

At Tenity, we can support your corporate no matter what stage of your innovation cycle you’re at. 

If you’re ready to collaborate with startups, we can help you make those connections. If you’d prefer to invest, we can guide you in finding the right opportunities. Or, if you’re only starting out with your innovation journey, we can help you build your entire innovation strategy. 

As we’re focused on fintech, we have in-depth knowledge of local fintech ecosystems across the globe. It makes us well-positioned to help you work with and invest in the startups that align with your goals. 

Work with with Tenity and be part of the UK’s fintech ecosystem

As the undisputed leader of Europe’s fintech scene, the UK is an exciting place to partner with a startup, or to set up or move your own startup. 

If you’re looking to launch, collaborate with, or invest in a fintech in the UK, reach out to us at Tenity.