FinTech investment drops amid Brexit fears
UK investment in the financial tech sector dropped a massive 33.7 per cent in 2016 despite increasing 11 per cent globally.
Research commissioned by the FinTech trade body Innovate Finance showed $783 million was invested in UK FinTech last year, compared with $1.2 billion in 2015.
The sector is now worth $17.4bn worldwide.
A year before the UK’s Brexit vote, Innovate Finance said the sector was worth £20bn in annual revenues to the UK, attracted 42 per cent of all European investment and employed 135,000 people.
It said the sector was targeting the creation of 100,000 jobs and $8bn of investment by 2020.
Lawrence Wintermeyer, CEO of Innovate Finance, said the 2016 slump was “largely attributed to the uncertainty of Brexit and geopolitical/macro-economic factors”.
“The loss of passporting rights will hit FinTech payments firms if special provisions to the single market are not negotiated upon leaving the EU,” he said.
“Over 30 per cent of Innovate Finance FinTech founders and CxOs are non-British, with many employing European staff.
“Attracting further investment to UK FinTech remains the number one priority.”
However the UK is still attractive to US dealmakers following the Brexit vote, according to figures from Deloitte.
And Siemens’ chief executive is chairing a new group to investigate ways of promoting innovation and increasing exports as Britain prepares to leave the EU.