I will start with the year ahead. And unsurprisingly the elephant in the room is dealt with. We already know that Brexit could reduce fintech investment and even see fintechs leave the UK and/or set up operations in the EU, if the UK leaves (Yes I said if).
Part of the concern is the reduced access to staff with the right tech skills. I speak to lots of fintechs and most of them have a really mixed workforce in terms of nationalities, with a very large proportion citizens of EU countries other than the UK.
Crosswell puts the search for talent as a major challenge this year. Obviously it all depends on what relationship the UK has with the EU after Brexit, if it does happen.
She said: “As the sector thrives and the competition for talent heats up, we cannot ignore the elephant in the room: Brexit.
With UK fintech sourcing 42% of its employees from overseas, the future relationship with the EU will be key to the UK maintaining its competitive advantage in fintech, she said.
We therefore expect to see an increase in efforts, from both the state and private sector, to ease the pressures on the current pipeline — whether that be through domestic efforts, working with industry and schools/universities; or from the global talent pool.”
Continuing on talent Crosswell said fintechs will start to try and increase the diversity of their workforces. ”This will require buy-in from the top and development of a pool of diverse talent from the bottom-up. Diversity is no longer an act of simple awareness building. The dialogue has shifted and is now geared towards action and ensuring the change actually happens.”
Increasing diversity should be an important target for all organisations and fintech could really change how the traditional banking sector looks in terms of its workforce.
An last but certainly not least another subject on the minds of all the tech sector is investment funds. Figures released last week by London & Partners painted a worrying picture for UK tech. The amount of money invested by venture capitalists in the UK dropped dramatically in the last 12 months, VC investment in UK tech dropped from £3.12bn to £2.49bn in 2018 compared to the year before. In London, where most fintechs are based the fall was from £2.53bn to £1.8bn.
Crosswell said there are people in the fintech industry that expect investment in fintechs to come from more sources other than VCs.
“IPOs and M&A activity will likely increase, although some believe investment into the sector will be less focused on venture capital and angel funding and more on corporate funding or principal investment,” she said.
If you have any predictions or comments on these predictions please leave a comment.