The UK’s economic landscape has been rocky in the aftermath of the COVID-19 pandemic; shortfalls were caused by disruptions to work across industries, and efforts to rebuild the economy frustrated by hikes in energy prices alongside mass resignations as workers trade up for new positions in other sectors.
But despite the various factors mitigating growth, many businesses have enjoyed record profits. One industry has been thriving more than most, with unprecedented growth in 2021 and a bright future in both B2B companies and retail spheres: fintech.
What is Fintech?
The term ‘fintech’ stands for ‘financial technology’, and broadly refers to resources and innovations relating to the management of the financial activity. Consumers have long been familiar with the sector, having to use fintech solutions on a near-daily basis since the advent of online banking in the late 20th century. However, online banking platforms and digital debit transactions are not the only remits of fintech; the industry is also responsible for breaking new ground in the form of cryptocurrency and decentralised transactions.
Naturally, these areas of innovation and development together represent an entirely new sector of finance, replete with its own legal ramifications. The result has been the sympathetic rise in demand for the fintech law firm, which exists to advise fintech start-ups on navigating international law in the development of new financial technologies, as well as to advise other organisations on implementing those innovations in their own business.
Fintech solutions today encompass a wide variety of private sector and commercial needs. Back-end finance management software for large corporations; retail trading apps that enable consumer access to the UK stock market; Crypto wallets and trading systems: all of these and more constitute the present-day fintech scene and are together seeing a massive rise in interest for the sector.
Sevenfold Increase in Investment
According to a 2021 report by KPMG, the UK’s fintech sector reached a record high in 2021, clinching £18 billion worth of deals amounting to a sevenfold increase in investment in the sector. Much of that increase was caused by a single purchase carried out by the London Stock Exchange, but the 282 deals completed surrounding that one-off payment indicates an explosion of interest in fintech start-ups by investors and venture capital corporations.
The uplift in investment places the UK as home to the second-largest fintech sector in the world, behind the US – in spite of completing more deals than the US in a comparable period the previous year. The sector is set to see continued growth, as the start-ups receiving investment install themselves as essential services to the private sector in the UK and internationally. The rise in investment signals a change in tack for London’s vibrant financial sector and the possibility of industry disruption like never before.