Putting the Spotlight On the North’s Growing Status As A FinTech Hub

The economy has been through a significant period of transition and uncertainty in recent years. But with it has come accelerated digitisation. Both for the lives of individuals and businesses in general. Many industries have benefited from this shift, particularly FinTech, which has reported remarkable growth in the same way as other tech-enabled sectors. The UK’s FinTech sector is seen as one of the major global hubs and is larger than those of the next 4-5 European countries combined.

This has been evident across all the key regions of the UK in terms of the number of FinTech firms, FinTech jobs, and the general profile of FinTech within the economy, however, the North of England particularly, has established itself as a burgeoning FinTech hub. Bruntwood SciTech is a long standing supporter of the region’s FinTech sector, and works closely with FinTech North, an organisation that brings the region’s FinTech community together via an ongoing programme of events, and is based out of Platform in Leeds.

Northern cities such as Manchester and Leeds, with their vibrant financial and digital sectors, are increasingly attractive to international FinTech firms and future FinTech talent.

Does the North have the workforce to support the industry?

As in all tech-enabled sectors, talent is a hot topic in FinTech, both in respect of training and reskilling of the existing workforce. and is one that Bruntwood SciTech has shone the light on before. It is one that is being formally addressed by schools, colleges, and universities, and also via the activities of FinTech North and other regional Fintech groups across the UK.

In the UK, schools are preparing students for tech careers by integrating coding and STEM education into their curriculum, promoting digital literacy, and offering tech clubs and competitions. Initiatives like Computing at School (CAS) and partnerships with tech companies and universities provide real-world experience. Professional development programmes for teachers ensure they stay current with the latest technology. Specialised programs such as Career and Technical Education (CTE) and T Levels give students a head start in tech fields. Efforts to increase diversity and ensure all students have access to technology are also key. Emphasis on critical thinking, problem-solving, and the ethical implications of technology rounds out this comprehensive approach to developing future tech talent in the UK

High-growth sectors often face a shortage of skilled workers because the roles are so new. Recruiting is challenging across the country, not just in the North. However, the North's strong finance sector heritage combined with its emerging tech capabilities creates a unique advantage. Northern universities are increasingly offering FinTech-related courses, continually bolstering their interest in the sector.

Only time will tell if this will impact the availability of talent, not just in the North but further afield. But investment is the first step towards growth and is further proof that a shortage of talent is being taken seriously.

Is the North prepared for FinTech growth?

Manchester is already the second largest private equity hub in Europe, after London. It's also the largest ecosystem outside London, adding £1bn to the regional economy each year.

This continued rate of growth is not only great for Manchester, but also good news for tech in Leeds, Liverpool, Cheshire and other parts of the North.

International interest in the North of England is on the rise, with many businesses looking to expand into the UK eyeing Northern locations. In fact, the most recent reports from Whitecap Consulting on Leeds and Manchester show that number of Northern FinTechs has doubled in the last three years, with increasing international interest.The region has hosted inbound trade missions from international locations such as the Nordics, Baltics, Eastern Europe, USA, South America, Australia, the Far East, and mainland Europe.

Government initiatives have significantly boosted the FinTech industry, especially in the North. For example, Leeds is home to the FCA, Bank of England, and the UK Infrastructure Bank, further cementing its position as a FinTech powerhouse. It was also the location for the launch event for the new national Centre for Finance, Innovation & Technology (CFIT), in February 2023.

The North East is also actively developing its FinTech sectors, with 45 FinTech firms identified in a Whitecap’s 2022 report focused on the a region that includes Newcastle and Durham, making it the third-largest FinTech region in the North, with increasing momentum following the creation of a steering group and several workstreams.

There is an ever-increasing level of collaboration and coordination across the different regions of the North, and, in addition to the cities already mentioned, there is increasingly prominent activity in such as Bradford, Sheffield, Hull, Darlington, Middlesbrough, Blackpool and Chester.

Put simply, FinTech startups need access to people, money and customers. If the North can tick these three boxes, then these firms will have more of a chance to succeed. This success will lead to even more start-ups, whether they are permanently headquartered in the North or have decided to create a base there.

Is there enough funding for the North to succeed?

Funding is a hot topic no matter the industry. Entrepreneurs often believe there isn’t enough funding, while investors may argue that there aren’t enough investable businesses. Businesses thrive in supportive environments. If a city provides the necessary tools, organisations will continue to move there, attracting the investors they need.

In the North of England, FinTech companies have access to a variety of investment funds aimed at fostering innovation and growth, such as The Northern Powerhouse Investment Fund (NPIF), as well as Innovate UK's Smart Grants and UK Research and Innovation (UKRI) funding. These funds, along with support from angel investors and venture capital, are crucial in driving the success of FinTech startups in the North.

How can the North match other major cities?

Like all businesses, FinTech hubs need people, money and access to customers. These are some of the biggest challenges that all businesses need to overcome. This is done with a supportive ecosystem that helps entrepreneurs develop and grow their businesses. This means engaging with the public sector, established financial services organisations, universities, tech firms, advisors, investors and the providers of workspaces and hubs.

While London has a well-established ecosystem, other regional cities are rapidly developing their own competitive environments to support FinTech businesses of all sizes.

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