The economy in Leeds is continuing to grow in the digital sector alongside the rest of the country, and an expert report has recently tipped the City Region to become a future FinTech hub to coincide with the rapid increase in demand for the system itself, and for businesses that use it.
The report made by Whitecap Consulting has been supported by many key organisations in Leeds City Region, including those based in Leeds City centre such as Yorkshire Building Society and the University of Leeds. It outlines how the region is in a strong position regarding FinTech and the demand for its services from established financial services and technology organisations with a presence in the region, with more and more business start-ups specialising in FinTech in the area. Although the current number of FinTech-dedicated hubs and workspaces is low, the report details how there is room for substantial growth in this area, with an increasing desire from companies to engage with FinTech innovation.
Financial services based in Leeds are set to generate more than half of GVA growth over the next ten years alongside the economy growing by 21% during the same period, meaning that financial business start-ups and already established financial businesses have an advantage over competitors by being based in Leeds.
FinTech as a Developing Industry
As technology develops at an accelerated pace, the need for more efficient financial services has grown. From the introduction of credit cards to the first home online banking service and more recently contactless payments, there are always new methods of making relevant services more accessible.
Business start-ups are revolutionising the way FinTech works by challenging established financial companies in all sectors, with more flexibility regarding the methods they can trial compared to bigger companies. FinTech firms raised a total of £1.28bn in venture capital investment in 2017, a gain of more than 150% from £505m in the previous year.
FinTech and the Northern Powerhouse
The Northern Powerhouse is a proposal set out by the government that aims to eliminate the economic divide between the north and the south of England and boost investment in northern towns and cities, including in the financial industry.
FinTech developers have vocalised their confidence in financial technology becoming a big part in driving the Northern Powerhouse project forward, stating that FinTech has the potential to become extremely popular in the north, an area typically associated with the manufacturing, science and service industries.
Manchester-based FinTech company AccessPay received an investment of £1m as part of the Northern Powerhouse project earlier this year, and industry leaders are increasingly confident that this investment will carry over to Leeds soon. Studies like the one conducted by Whitecap Consulting show that the City Region FinTech ecosystem is in a strong position regarding its Financial Services, data and technology sectors.
The future of FinTech appears to be heading away from the capital, up over the Pennines and towards the prospering city of Leeds. Substantial room for investment and growth for businesses alongside big investment projects are helping to put Leeds City Region firmly on the map as the go-to destination for companies that specialise in delivering systems that support other businesses with improved payment systems, customer relationship management and invoicing.