The London Stock Exchange has just announced the launch of a new review looking into fintech investment in the UK as part of Fintech Week London, to find out why investment is declining and what can be done to support the sector.
Account Director at The PHA Group, Rhys Merrett believes that the fintech industry, despite being a defining factor in the UK’s post-Brexit economy, needs to undertake a transitionary period where the focus shifts from growth to consolidation.
He said: “The government wants fintech to define the UK’s post-Brexit economy. Now, the country is recognized as a global fintech hub, offering the environment and conditions needed for fintech start-ups to scale-up quickly. Yet, seemingly high valuations, staff cuts and drying investment puts the industry at a crossroads, which is why the LSE review has now been launched.
“For fintech to remain a core industry of the UK, it needs to transition from growth to consolidation. A reduction in valuations and investment is not necessarily a negative trend. If anything, it ensures the sector can collectively take a step back and properly evaluate its long-term direction. Afterall, with Web3.0 technologies like blockchain on the horizon, we are very much likely to see a new wave of fintech innovation in the coming years.
“Ultimately, the LSE review must determine how momentum can be maintained, so fintech is on a constant trajectory for growth, rather than volatile peaks and troughs which are not conducive to investment flows.”