Global investment in financial-technology ventures has more than tripled
from $928 million in 2008 to $2.97 billion in 2013 and, over the past
three years, such investment increased at more than four times the rate
of overall venture-capital investment, according to a new report by
Although the United States remains the dominant market for so-called
"fintech" investment, the fastest growing region is now the United
Kingdom and Ireland (UKI). Deal-volume, mostly related to London, has
been growing at an annualized rate of 74 percent since 2008, compared
with 27 percent globally and 13 percent in Silicon Valley.
During the same period, the value of fintech investment in UKI increased
nearly eightfold to $265 million in 2013. The annualized growth rate (51
percent) was nearly twice the global average (26 percent) and more than
twice that of Silicon Valley (23 percent).
As a result of the rapid growth in UKI, which accounts for more than
half (53 percent) of all investment in Europe, London has emerged as the
fintech capital of Europe, according to the study.
"The fintech boom is a huge opportunity for London with its
well-developed financial and technology industries," said Julian Skan,
Accenture managing director overseeing the FinTech Innovation Lab
London. "It is also crucial to London maintaining its position as the
leading global financial center because of the growing importance of
technology to the financial industry."
The growth of London's fintech cluster has been driven by its strength
in financial services and a thriving tech sector that has enjoyed an
entrepreneurial renaissance in recent years. Four of the world's ten
biggest banks have either global headquarters or European headquarters
situated in London. There are approximately 135,000 financial-services
technology workers in UK, according to the Accenture study.
Although Ireland has a developing tech industry of its own, it is
closely integrated with London's fintech cluster by incubating fintech
companies that look to London's large financial center in pursuit of
customers, talent, partnerships, and funding.
'Challenges to overcome'
Accenture's research analyzed global fintech investment data from CB
Insights which shows that while fintech investment in UKI is growing
fast, the market is still relatively immature. Fintech companies in
Silicon Valley received $950 million in venture funding in 2013 alone,
while investment in UKI since 2004 has totaled $781 million. And a much
larger proportion is first-round investment. Last year nearly half (47
percent) of UKI investment was first-round deals compared with 36
percent globally and 27 percent in Silicon Valley.
Julian Skan said: "For a relatively new sector, fintech is developing
fast. There are growing number of incubators and accelerators and
increasing interest among both the big banks and the venture capital
community. But there are still challenges to overcome. It is harder to
raise funding, and entrepreneurs are less focused on commercializing new
ideas than in the US. It is also difficult for small entrepreneurial
companies to gain entry to big global banks."
The study, entitled "The Boom in Global Fintech Investment; A new growth
opportunity for London," was released at the second annual "Investor
Day" of the FinTech Innovation Lab London. Launched in 2012 by Accenture
and a dozen major banks in London, with support from the Mayor of
London, the City Corporation and the Technology Strategy Board, is aimed
at providing support and mentoring to early-stage fintech companies. The
majority of participants in last year's program have gone on to sign
deals with banks and between them have raised $10 million in new
The 2014 Lab participants are developing cutting-edge financial services
applications that range from one-tap mobile payment solutions to
Artificial Intelligence and using photos for login rather than a pin
number. They include: Erudine, FinGenius, Logical Glue and PixelPin from
the UK, PhotoPay from Croatia, Squirro from Switzerland and uTrade from
The Lab is a sister program to the FinTech Innovation Lab in New York,
which was co-founded by Accenture and the Partnership Fund for New York
City in 2010. The New York Lab's 18 alumni companies have raised $47
million in venture financing, and created approximately 150 jobs after
participating in the program.
"The rapid rise of global fintech investment is a result of the massive
change occurring in the financial services industry," said Richard Lumb,
group chief executive-Financial Services at Accenture. "By facilitating
digital innovation, banks will be better positioned to serve customers
and improve efficiencies for the long-term. Our commitment to innovation
and fintech continues to grow, not only in London and New York, but also
in other key financial centers around the world."
The study is based on Accenture's analysis of fintech investment-data
from CB Insights, a global venture-finance data and analytics firm. The
analysis included global financing activity from venture capital and
private equity firms, corporations and corporate venture-capital
divisions, hedge funds, accelerators, and government-backed funds. The
research also included global exit activities of fintech companies -
including M&A and IPOs - and a number of regional tracking dimensions
for Europe, North America, and Asia-Pacific. The data ranged from 2004
to 2013, with a primary focus on five- and three-year trends. Fintech
companies are defined as those that offer technologies for banking and
corporate finance, capital markets, financial data analytics, payments
and personal financial management.
Accenture is a global management consulting, technology services and
outsourcing company, with approximately 281,000 people serving clients
in more than 120 countries. Combining unparalleled experience,
comprehensive capabilities across all industries and business functions,
and extensive research on the world's most successful companies,
Accenture collaborates with clients to help them become high-performance
businesses and governments. The company generated net revenues of
US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page
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