London: The World’s Fintech Capital

Historically, the City of London has always been at the centre ofthe world’s finance and loan markets.  A guaranteed instant payday loans direct lender allows borrowers to apply online easily and conveniently.  The fact that the company is FCA authorised gives them greater peace of mind since they know they work according to a reputable and ethical business model.         

However, the UK capital is also now at the forefront of global fintech companies.  In 2017, £800 million was invested in fintech companies, many of which were start-ups.  This figure was double that of 2016 and clearly illustrates how quickly the market is expanding.  

One of the advantages London possesses to fit this role is the combination of technology, the investment capital available and the willingness and vision of successive governments to encourage fintech firms.  This is clearly shown by the boost given by Phillip Hammond’s March 2018 budget.  These three factors are encapsulated by Eileen Burbidge, the special envoy for Fintech at the British Treasury who said,

“You basically have Silicon Valley, plus Wall Street, plus Washington DC all in one place.”

To illustrate how far ahead London is compared to both its European and global competitors, let’s look at some of the cutting-edge fintech companies based in the capital.  

Founded in 2010, Funding Circle is the prime example of how much both borrowers and investors have welcomed the idea of peer-to-peer lending.  This crowdfunding platform offers unsecured business loans to SMEs which might be rejected by traditional lenders. However, it also gives lender-investors a better return on their savings now that interest rates are so low with traditional mainstream lenders.  Investors using the platform are also able to specify how much risk they are willing to accept.  In September 2018, it became the first P2P lender to appear on the London Stock Exchange with a value of £1.5 billion.  

Started just a year after Funding Circle, MarketInvoice offers invoice financing to SMEs.  The company is supported by the British Business Bank as well as private investors and financial institutions.  In their first 7 years of business, they arranged £2 billion worth of cash upfront to businesses with cash flow problems.  Their business model works as a real-time auction where investors bid on an invoice with the option to offer all the financing or a percentage of it (after deducting their profit share).  MarketInvoice takes a commission on the value of any invoice financing made through its platform.  

All fintech companies are supported 100% by the FCA (Financial Conduct Authority).  It has a Fintech hub which allows new companies offering consumer financial services to find out all the information, advice and guidelines they need about setting up their business.  Like any other UK company offering consumer services, they have to be registered with the industry’s watchdog and become authorised.  Advisors at the FCA can take them through the procedure every step of the way and make sure that they follow all the necessary regulations.             

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