London remained the second most active city in the world for fintechs – second only to San Francisco, a global report has revealed.
The 2021 Global Fintech Rankings, produced by Findexable in partnership with Mambu, has identified a number emerging fintech hubs, including several in the UK.
More than 50 new cities and 20 new countries joined the index for the first time. These included Birmingham, which entered the rankings at 123, Cardiff (ranked 127th) and Newcastle upon Tyne (ranked 155th).
There were also significant climbs from Cambridge, Edinburgh, Belfast and Glasgow.
Only London and Manchester are home to the headquarters of ‘unicorn’ companies, privately held start-ups with valuations over $1bn (£714.4m).
The report covers the whole of 2020 and the first half of 2021. It found that even during a year of significant economic downturn and serious disruption, fintech companies were being launched and significant investment was being made in the sector, more than doubling the value of fintech unicorns as a group from $199bn to $440bn.
The research showed that fintech is bridging gaps in consumers’ lives, which was made more important during Covid.
Despite this, there is a significant gap between major players and the next generation of innovators in terms of funding that needs to be addressed to keep the industry moving forward with new ideas.
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“The UK continues to be a major player in fintech, but unlike the larger finance sector it is moving away from being largely London-based,” said Simon Hardie, founder and chief executive of Findexable.
“We are seeing how investment in creating technology hubs in secondary cities is translating into the creation of thriving communities and viable companies. We have even seen fintech companies emerge in towns like Macclesfield, Ashford, Caerphilly and Inverness.”
“Fintechs are part of a global revolution to make financial services easier, faster and simpler, and the UK is a major part of this,” said Elliott Limb, chief customer officer at Mambu.
“They are changing the way we save, spend, borrow and invest money. Whether competing, cooperating or supporting traditional financial institutions, they are reshaping digital services for a real-time, on-demand world.”
The index algorithm ranks the fintech ecosystems of more than 264 cities across 83 countries incorporating data from Findexable’s own records and collated and verified by its global partnership network. The country and city rankings were calculated from a total score comprised of a combination of three metrics.
These are: the size of the fintech ecosystems and supporting structures, the impact and performance, including size and growth, of fintechs, and the environment, including incentives for start-ups and regulatory environment.