We're welcoming some positive news for UK fintechs
The Covid-19 pandemic has impacted fintech funding in the UK, however, there's at last some positive news
Creating a new business, growing a startup or adapting a company in these unpredictable times I’m sure - like me - is keeping many people up at night. This is especially true for those working in fintech. Our sector was born and flourished in from the last financial crisis, however, the news stories so far seem to predict this crisis may lead to the decline of many firms, rather than the creation.
In fact, the UK fintech sector would need to raise £825 million to keep businesses afloat through the Covid-19 pandemic, according to a recent KPMG report. This is because startups in the sector rely heavily on funding which has declined since the pandemic. The report also reveals over half of fintech startups only had 18 months runway when the crisis hit in March.
However, in the UK there is some good news. On 20th July the Government announced a review into the UK’s financial technology industry to identify opportunities to support further growth of the sector.
The Economic Secretary to the Treasury & City Minister John Glen said: “This independent review will help us to uphold and enhance our global reputation, support growing firms, and promote the integration of new technologies across financial services to the benefit of businesses and their customers.”
The UK Treasury has promised to focus on 5 workstreams as part of this review. These workstreams are skills and talent, investment, national connectivity, policy and international attractiveness. The report is set to be published early next year.
The UK fintech sector would need to raise £825 million to keep businesses afloat through the Covid-19 pandemic
We hope the outcome of the review protects the fintech businesses across the UK, a sector that now employs over 60,000 people and is estimated to be worth £7 billion. And with governments willing to come to the aid of our fast-paced, innovative sector we believe it is resilient enough to adapt and continue to grow.
As always, Tribe is here to support fellow fintechs to help boost their business in times of change, while making their users happy. If you fancy finding out more you can get in touch here >
Impact of Covid-19 on fintech funding and what it means for UK firms