Greater Manchester Fintech Sector: New report reveals growth and challenges

Greater Manchester’s fintech sector is a thriving ecosystem, with significant growth and development in recent years. According to a new report, the region’s fintech sector is the largest outside of London, employing over 10,000 people and is set to contribute more than £1 billion to the regional economy this year.

Whitecap Consulting shared regional insights into Manchester’s success in its latest Greater Manchester FinTech Ecosystem Report 2023. The launch took place at Bruntwood SciTech’s No. 1 Circle Square facility in Manchester city center on Friday.

Report highlights

Greater Manchester is home to over 14,000 financial services and technology firms, employing over 152,000 people in the sector. Its financial output for fintech, as measured by the region’s gross value added (GVA), has increased by an impressive £540.6m to £905.0m.

The number of fintech startups and scaleups in the region has increased by 218 percent since 2020, and is now 124. A total of 147 fintech companies are based in the region, up 133 percent from three years ago.

Around 240 firms are expected to employ an estimated 10,000 people in fintech roles, contributing £1bn to the local economy by 2023. Core strengths include payments, lending, wealth technology and accounting.

A fifth of the UK’s home-grown fintech unicorns have a presence in the region, and there are seven fintech unicorns in total.

The University of Manchester established the Center for Financial Technology Studies in 2022. It is a knowledge and research hub for digital advances in finance, and offers a wide range of specialist courses and research areas.

The geographical spread of fintech companies in the region is increasing. Only 55 per cent of fintechs are now based in central Manchester. Stockport has seen the most growth and attributes 13 per cent of the ecosystem.

Engaging London

The report recommends that Manchester must take advantage of engagement opportunities via organisations, such as City of London Corporation and Center for Finance, Innovation and Technology (CFIT).

“A good challenge,” agrees Nicholas Lyons, Lord Mayor of the City of London.

Speaking at the launch event, Lyons said: “One of the recommendations in the report is to challenge the City of London to engage more with the North West. This is my second day up here in Manchester on a visit focused on meeting some of the leaders in the banking and technology sectors. And it’s already very clear to me that there are a huge number of opportunities for fintech to flourish in Manchester.

“You are home to 14,000 financial services and technology firms employing over 152,000 people in the sector with start-ups and established international banks. We can expect the sector’s GVA to reach a billion pounds by the end of this year. This is a great success story, not just for Manchester and the North, but for the UK. And I want to congratulate you all on the hard work that has brought us here.”

Chris Says, foreman i FinTech North, welcomed the Lord Mayor’s spotlight on Manchester.

“The launch of this new report was significant in several ways,” says Sier. “Not only did it provide a platform to tell the story of the incredible growth and scale of the fintech sector in Greater Manchester, but it was also the first time the Lord Mayor has been a guest speaker at a FinTech North event.

“I am really encouraged by the continued development of the fintech sector and I hope we will see increased regional, national and international collaboration in the coming months and years.”

Better collaboration

In a preface to the report, Charlotte Crosswell OBE, head of the recently launched Center for Finance, Innovation and Technology (CFIT)also emphasized the importance of better connections.

“It is vital that we continue to strengthen the links between industry, academia, government and regulators to support this exciting sector, and ensure its impact is felt up and down the country.

“I’m excited to see the long-term developments that will arise from CFIT’s work, from our innovation hubs that create an invisible thread between the UK’s cities and regions, to our collaboration with universities, further education colleges and schools.”

Ways to improve

Financing

While Manchester is an important funding hub, regional funding can be challenging to navigate. Investors in London or the US are generally more attuned to early fintech investment opportunities, which is why many founders prefer to look to these regions for funding.

Pawel Oltuszyk, founder and CEO of smart digital account Frost, comments in the report: “The main thing for most startups is money. Manchester should compete with London for foreign investment, which in turn will help startups. I think more can be done to promote the region so people know it’s a great place to live and do business.”

Whitecap’s report suggests more structured support to help startups and scale-ups navigate the sector and identify suitable investors to approach. Additionally, entrepreneurs should engage with/support other entrepreneurs and entrepreneurs to share insights and experience.

Better partnership

There is a positive attitude towards collaboration, but issues on both sides can make it difficult to develop meaningful partnerships, the report finds.

For example, some major financial services brands have run support programmes, but there is “less evidence that mid-sized businesses are working together, while many entrepreneurs need to improve their understanding of regulatory considerations”.

The report suggests that larger organizations become more engaged in regional fintech ecosystems, including regional focus/distribution of national initiatives, and shares opportunities for fintech firms to offer support.

It also advises on an increased focus on collaboration in event formats and on increased accelerator/innovation activity.

Focus on fintech in the north

Organizations such as Bruntwood SciTech, GFT, MIDAS, Slalom, Vialto Partners, University of Manchester, Rise, made by Barclays, pro-manchester and FinTech North have collaborated on Whitecaps Greater Manchester FinTech Ecosystem Report.

Last year, Whitecap Consulting also identified the opportunity to create more than 2,000 new fintech jobs in the North East by the end of 2025. In addition, in February 2023, they launched their Leeds City Region FinTech Report 2023.