by Charlotte Crosswell, CEO, Innovate Finance
The best tech companies fix broken industries by disrupting incumbents. At their heart is an undying belief in the ability of technology to benefit society and transform economies. Transformative innovation relies on collaboration, the sharing of ideas and coming together for the greater good.
This is something we’re increasingly seeing in the fintech sector – collaboration is now driving the rapidly scaling industry.
And scaling it is.
2018 was a record-breaking year for fintech venture capital investment – $36.6 billion invested globally, representing a 148 per cent increase on the year before. Investment flows into the UK’s fintech sector continued to perform strongly in the first half of 2019, reaching a record level of $2.9 billion across 123 deals.
The rise of fintech has triggered a global movement of innovation in financial services. Companies from early-stage start-ups to large corporates are increasingly playing a part in improving the way our financial system operates. Even big tech is starting to enter the market, with Facebook recently unveiling plans for a cryptocurrency and Apple preparing to launch its version of a credit card.
Fintech contributes more than £6.6 billion to the economy every year, establishing the UK’s fintech scene as the crown jewel in the wider UK tech industry and a genuine leader on the world stage.
However, as the sector matures, so does the need for greater collaboration between hubs. Whether it is for international expansion or raising capital, fintechs are increasingly borderless, with growing coordination taking place between global financial centres.
Collaborative hubs enable ease of access to different markets for fintech and, in turn, result in global growth – which is undoubtedly good for the sector as a whole.
From America to Asia, there are several fast-growing fintech markets across the globe, with a critical mass of start-ups building world-class centres and areas of expertise.
The UK government has increasingly recognised the importance of partnering with hubs of this kind and has now signed fintech bridges with Singapore, China, Hong Kong, South Korea and Australia.
And collaboration is not only taking place on an international scale. Connections can and should be built locally in the UK too. Initiatives such as the FinTech National Network help connect fintech ecosystems across the UK, enabling them to communicate more effectively with international markets, government and overseas partners.
In short, taking the UK’s fintech sector to the next level relies on forging stronger international and local ties, and it is heartening to see this happening across the board. We are well placed to realise fintech’s huge potential to transform the lives of billions globally – whether that’s by increasing transparency, providing much-needed infrastructure or banking the unbanked. We won’t slow down on collaboration – if anything, there’s a greater opportunity than ever to explore new partnerships, develop and evolve.
In an increasingly global landscape, championing collaboration between innovative fintechs is the key to enabling sustainable growth. Inward looking? I’d say quite the opposite.