The UK’s northern region has a fantastic fintech sector. But everyone needs to be included
FinTech North was founded in 2016 to bring together and power the UK’s northern fintech community.
Julian Wells co-founded the organisation with Dan Rajkumar, after years of attending conferences in London and concluding that there was a big enough community to start one in the north of England.
A Leeds City Region FinTech Report, produced by Whitecap Consulting and presented by Wells, its director, at the FinTech North Leeds Conference 2023 yesterday, shows the strength of the fintech sector in Yorkshire’s biggest city.
More than 60 financial services and fintech firms operate in Leeds, while over 100 fintech firms are based in the Yorkshire region.
The growth of the fintech sector in Leeds is part of the UK’s overall success. There was $90b invested in UK fintech in 2022, which was behind only the US. And while this was a drop on the $130b invested the previous year, it was still above the level seen in 2020.
Moreover, globally, there was a 30% decrease in fintech funding in 2022, but the UK had a comparatively respectable 8% decrease.
Janine Hirt, chief executive officer of Innovate Finance, believes: “The UK is ahead of other countries because of progressive regulators. We need to ensure that we can continue to move quickly. Other countries are watching and following us.”
She also said that there should be a “drive to greater diversity and inclusion in fintech”.
Eve Roodhouse, chief officer of culture and economy at Leeds City Council, kicked off the FinTech North Leeds Conference with a welcome speech about the launch of its inclusive growth strategy to address inequality in city.
Leeds has a population of more than 800,000. Of the city’s children, one quarter live in poverty.
Roodhouse mentioned the MIT reap programme in the US, which engages communities around the world to strengthen innovation-driven entrepreneurial ecosystems and transform economies.
Roodhouse urged attendees in Leeds to “back entrepreneurs and make Leeds a digital city”, as inclusive growth includes financial inclusion.
Targeting apprenticeships and graduates will help to ensure a bright future for UK fintech. Stuart Clarke MBE, the festival director at Leeds Digital Festival, said that the UK needs to “inspire young people to start a career in tech”.
Ezechi Britton, chief executive officer of The Centre for Finance Innovation and Technology (CFIT), said: “The UK has a great reputation as a tech hub, but we need to break down barriers to getting funding.”
Britton pointed out some embarrassing figures as to where investors put their money. In the UK, only 0.2% goes to black founders, and even less to a black women founder.
Financial inclusion is also about the type of businesses that have access to finance. Natasha Jamal, Mastercard vice president of social impact, discussed its project in Kenya, which helps small business owners to access digital credit, to support or grow their business.
Jamal said: “Small business are vital to the economy but many struggle to survive. Fintech can step in for them when big banks step back with investments.”
Mastercard also supports small businesses in the UK with Strive UK, by connecting them to the right technology.
Jamal added: “Digitisation as a key driver of growth. We need to build products and services with inclusion in mind.”
However, true sustainable impact will only come with partnerships, Jamal said: “If we want to go far, we must go together.”
The World Bank’s definition of financial inclusion “means that individuals and businesses have access to useful and affordable financial products and services that meet their needs, delivered in a responsible and sustainable way.”
Elizabeth Reed, executive director at J.P. Morgan, urged fintech to identify the causes of financial exclusion, such as people that don’t have a passport or digital illiteracy, and figure out how tech can solve these problems.
Lisa Meynell, head of sales, digital banking at TransUnion, emphasised: “Everyone should have access to financial products.”
Education was mentioned throughout the day as a key means of improving financial inclusion. Meynell said: “Financial education should be part of the curriculum. Children shouldn’t have to learn about finance from their parents or TikTok.”