What will UK fintech look like in 2035?
Huge growth across the UK fintech industry over the last decade has been driven by a combination of factors, namely support from the UK government and regulators such as the Financial Conduct Authority (FCA).
Because of this, the development between 2025 and 2035 will unsurprisingly be substantial.
This is an extract from the recently published report, ‘The Future of UK Fintech – 2015-2035’.
Emma Kisby, Cogo CEO, EMEA, reiterated this point in conversation with Finextra by recalling the year in which the first ifgs event was held.
“2014 saw the UK Government, supported by City of London Corporation, launch the fintech membership body, Innovate Finance, which supports innovation and fintech growth and helps position the UK as a global leader in fintech. Launching this recognised body
was a game changer, as it instantly gave UK fintech companies greater access to investment and offered support with international expansion, regulation and sourcing talent.”
Kisby added that the launch of both the FCA’s Project Innovate and the Regulatory Sandbox have been growth drivers, improving speed to market, reducing costs and offering regulatory support. Moreover, regional hubs such as FinTech North, FinTech Scotland
and FinTech Wales have ensured that opportunity is not only London-focused.
In Kisby’s view, UK fintech firms have also seen success due to the Fintech Bridges programme which helps organisations scale internationally or support global fintech firms establish roots within the UK market.
“As a hub for technology, financial services, and fintech innovation, the UK has provided Cogo (a green fintech) with invaluable opportunities for scaling and development. The dynamic ecosystem has helped Cogo develop strategic partnerships with leading
financial institutions, such as NatWest, and other
fintechs, such as Moneyhub. These collaborations have enabled Cogo to grow its reach (now working with 16 banks globally in just three years). Furthermore, the access to a broad range of resources, from government support to top tech talent to investors, has
been crucial in fuelling international ambitions,” Kisby said.
2025
The aftermath of the Covid-19 outbreak resulted in rising inflation and price surges across electricity, petrol and groceries, which in turn, increased the cost of living for the majority of households in the UK.
From 2021 to 2024, driving positive change and providing financial resilience for customers continued to be the catalyst for a lot of the developments across the fintech industry.
This encouraged strategic partners across the UK to establish the ‘2025 Fintech Pledge’ to help consumers build up their financial resilience and protect against the rising cost of living.
In an article published on Finextra, Zopa Bank’s Merve Arslan Ferrero explained how: “The UK fintech sector forms a crucial part of the British economy. In the last 15 years, firms have revolutionised people’s financial lives by reducing costs, enabling
innovation, and enhancing security. This impact has been driven by the highly competitive nature of companies like Wise, ClearScore and ourselves at Zopa Bank, to name a few. However, facing large-scale unprecedented issues like the cost-of-living crisis,
competition alone is no longer enough. One in four adults are in financial trouble or at the brink of difficulty, and the number of people classified with low financial resilience has increased by millions. We are only capable of supporting consumers with
these big problems by working together.”
Arslan Ferrero continued to say that the coalition – that has seen cross industry collaboration between the likes of Google Cloud, Salesforce, PayPlan, and StepChange – intends to drive 25 million consumer actions by 2025 that build up the financial resilience
of UK consumers.
25 million actions represent approximately 50% of the UK adult population and partnerships as part of this Pledge will be incentivised.
In conversation with Finextra ahead of ifgs 2024, Clare Gambardella, chief customer officer, Zopa Bank doubled down on the importance of financial resilience and the painpoints that consumers typically experience when managing their finances.
“Fintechs have simplified transactions, reduced fees and costs, delivered product innovation, and empowered customers to make better choices for their money. This wave of change has been driven by household brands like Wise, ClearScore, and Zopa Bank that
re-imagined how to deliver fair, intuitive, and transparent products that offer great value to consumers, putting them first.”
Summarising the progress that the fintech industry has undergone over the last five years, Gambarella added that “a favourable regulatory environment, a highly skilled and international talent pool, and significant consumer appetite for innovation” has led
to the UK becoming and continuing to be “the perfect breeding ground for fintech companies, many of whom have seen impressive growth over the last decade.”
- Regulation – The UK’s regulatory environment has been at the forefront of innovation with interventions like the FCA’s sandbox allowing a bespoke approach. In addition, industry bodies such as Innovate Finance, UK Finance, OBIE, and the Centre for Finance,
Innovation and Technology (CFIT) support fintech entrepreneurs in their journeys to scale. - Investment – Despite a 34% drop in fintech investment in 2023, the UK remains a European fintech leader. The UK is the second top global destination for fintech investment after the US and the leading European hub. British firms continue to attract more
funding than France, Germany, China, India, Brazil and Canada combined. In 2023 alone there were 450+ UK M&A, Private Equity and Venture Capital fintech deals. - Consumer adoption – The UK’s fintech adoption rate stands at 71%, reflecting widespread awareness and a large customer base. The UK consistently leads adoption and scaling of new products and services in areas such as contactless payments which later became
the norm across multiple markets. - Talent – The UK continues to be a top spot for highly skilled talent. In 2023 the UK has climbed up the OECD’s talent attractiveness list faster than any other country since 2019.
2035
How can the UK maintain its strong position in global fintech? By keeping pace with and preparing for a digital-first, technology-infused future. Mark Jannetta, head of EY’s UK Fintech Labs, believes that the UK is a “leading player on the
global fintech stage. However, in a constantly evolving and highly competitive landscape, it’s important that the UK builds on its strengths to retain its position.”
Jannetta explained that a priority for the UK is and should be to accelerate speed to market for innovative solutions and streamline onboarding to ensure UK banks can partner with fintech firms at a faster and efficient rate. In addition to this, progress
should not only happen in London; fintech hubs across the UK continue to be developed.
“It’s vital that fintech continues to develop in hubs such as Manchester, Bristol, Edinburgh and Glasgow, in addition to London. The CFIT – which was established to address barriers and opportunities for fintech across the UK – has been hugely influential
in this area since its launch in early 2023.
“As a result, we are seeing the fintech sector across UK regions benefit from greater access to talent, ecosystems and resources needed to drive growth. To build on this progress, it’s vital that a culture of collaboration with key regional bodies – including
Fintech Scotland, Fintech West and Fintech North – continues to be embedded across the industry,” Jannetta surmised.
Ahead of 2035, according to Gurdeep Singh Kohli, member, SC Ventures, the UK could learn from Silicon Valley’s ecosystem and culture, which promotes entrepreneurship, calculated risk taking, and encourages innovation. The ecosystem is enabled by a high concentration
of:
- angel investors who are willing to back high risk, high reward ideas;
- mentors who can give start-ups guidance;
- a culture which embraces failure as a learning experience for entrepreneurs.
Silicon Valley also has a dense network of venture capitalists, academics and tech giants who can provide funding and support for promising start-ups.
- Taxation also plays a very important role in terms of attracting and retaining fintech companies as well as encouraging both internal and external investment. The UK needs a tax system which will adapt and evolve in tandem with the fintech industry.
- Post Brexit, the UK needs to figure out how to attract talent from the rest of Europe – Government incentive and mentorship programs would also motivate more entrepreneurs in this space.
- Markets like Singapore and the United Arab Emirates (UAE) receive strong support from the Government, whether its tax incentives or funding to encourage corporates and start-ups to set up shop in those markets.
In 2035, emerging technologies will transform the way we bank and reshape financial services as the UK knows the sector today. This will have a substantial impact on industries outside of finance as trends such as embedded finance grow. Sustainability cannot
be ignored, and in order to serve the next generation of fintech users, the environment, social issues and governance must be considered.
