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Half of UK fintech firms confident in growth but have doubts over skills

UK fintech companies are confident that revenues will double over the next year, but have concerns over talent and customer take up of services

Half of UK financial technology (fintech) firms expect their revenues to double over the next 12 months and a third believe there is a real prospect of an initial public offering (IPO) in five years.

The research of 245 companies, commissioned by the government and conducted by Innovate Finance and Ernst & Young (EY), also revealed there are still concerns over the availability of talented staff and the take up of fintech services by consumers.

“It is fascinating to see the ambitious growth plans of UK fintechs, both in terms of hiring new talent and expansion into new markets, which will continue to drive revenues and investment in the sector,” said Imran Gulamhuseinwala, global head of fintech at EY. 

However, he said the survey revealed concerns about the availability of talent and the uptake of fintech services by customers. “The calibre of people leading and running fintechs is a fundamental pillar to success – as is the future pipeline. Without a large and diverse talent pool, the industry will struggle to retain its ability to innovate,” he added.

The recruitment of talent could be more difficult after the UK exits the European Union (EU), with less skilled workers likely attracted to the UK.

Charlotte Crosswell, Innovate Finance interim CEO, said: “We must continue to attract the talent we need to continue our growth and to help drive a more competitive, transparent and inclusive financial services sector.”

The report also found that just under half (49%) believe the biggest challenge is to increase customer adoption of fintech services.

Fintech firms offer digital services that take on traditional banking services. They are designed to be user-friendly and meet the needs of a generation of people that want to use technology such as mobile and analytics to make banking easier and more personalised.

According to research from PricewaterhouseCoopers (PwC) in March, fintech firms believe a third (33%) of traditional financial services business was up for grabs. These companies are offering the same financial products as traditional providers but in a digital format that is quick and easy for customers to access.

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Stephen Barclay, economic secretary to HM Treasury, said millions of people are using fintech. “Fintech is saving millions of people time and money by transforming how we use financial services. The fintech [survey] shows a thriving sector and we are committed to ensuring that the UK remains the best place in the world to start and grow a fintech business,” he said.

The UK’s fintech industry is mainly centred in London, but the city faces challenges from EU countries looking to take advantage of their continued access to European customers and skills.

Cities such as Frankfurt, Stockholm, Dublin, Amsterdam and Paris are vying for some of the fintech investments that London receives, and are trying to attract skilled workers.

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