Despite Brexit concerns, the UK fintech sector continues to attract rising levels of investment, but shortage of talent remains a cause of concern
The UK fintech sector has continued to attract rising levels of investment despite Brexit uncertainty, but there are concerns about a talent shortage.
The 2019 UK Fintech Census, based on a study of more than 200 fintech companies by trade body Innovate Finance and consultancy EY, found the average investment raised by each firm grew by a third from £15m in 2017 to more than £20m in 2019.
In their next funding round, UK fintech firms are collectively expected to raise a total of £2.6bn, with series A funding accounting for 26 per cent.
A third of respondents anticipate a stock market listing in the next five years.
The confidence comes despite concerns over Brexit and the impact on the economy as well as the UK’s position as a fintech leader.
Firms highlighted finding the right digital skills as a key challenge for the industry. More than half, 53 per cent, reported recruiting suitable talent as a major challenge.
Software engineering, system architecture and development was cited as the most in-demand skillset but also the hardest to find.
The second most valuable, and equally difficult to source, was data analytics and data science skills.
Gender diversity also continues to be a challenge for the sector.
The gender split of the UK fintech sector’s employee base is 70.5 per cent male and 29.5 per cent female, consistent with the 2017 Census results. The 2019 Census also showed that only 25 per cent of fintechs have at least one female co-founder.
Despite the global economic and political uncertainty over the last couple of years, the UK fintech sector has continued to attract impressive levels of investment, which is testament to its growth ambitions and reputation as a global leader, Tom Bull, UK head of fintech at EY, said.
He said the industry maintains a positive outlook, however challenges remain. Persistent issues over talent are a real cause of concern and the UK government’s talent and skills agenda is welcomed as the sector looks to secure the necessary resources to flourish.
Bull said that equally, the Census makes it very clear that more needs to be done to try and redress the gender imbalance, which remains a challenge despite the efforts of government and industry to make fintech more diverse.