Consultant publishes regional growth strategy for UK fintech sector
A new regional growth strategy, developed in response to a national strategic review of FinTech, has identified the opportunity to create more than 2,000 new jobs in the North East by the end of 2025, taking the size of the sector’s employment to more than 7,700 jobs.
The new strategy has been developed by Whitecap Consulting with support from key stakeholder organizations in the public sector, private sector and higher education. It outlines a high-level plan for the region to create more and better jobs, develop a collaborative, sustainable, growth-focused FinTech hub, and to promote regional, national and international connectivity.
In addition to the new jobs, the gross value added (GVA) created by FinTech is projected to increase by 11% per year, to reach £431m in 2025, and the number of FinTech firms is expected to almost double to 81 (currently 45) . The report finds that 76% of the region’s FinTech firms are currently based in Newcastle, Gateshead or Sunderland, with 11% in Durham and 9% in the Tees Valley region.
The project follows an independent national strategic review which identified the Newcastle and Durham area as one of the top ten FinTech clusters in the UK. The review of UK FinTech, published in February 2021, showed that the fast-growing sector generates £11 billion in GVA for the UK each year. The work has been supported by key regional stakeholders including Atom bank, Dynamo North East, FinTech North, Invest Newcastle, Invest North East England, Newcastle Strategic Solutions, Newcastle University, North East ROCU (North East Regional Organized Crime Unit), North of Tyne Combined Authority, North Tyneside Council, Northumbria University and Sage. The strategy was launched at an event in Newcastle on 19 October, hosted by Womble Bond Dickinson.
FinTech, the use of technology to improve the delivery of financial services, is a growth industry in the North East region that has been driven by significant levels of investment and employment. This investment has paid dividends, with a 58% increase in the number of firms operating in the FinTech sector over the past 3 years, including an 81% increase in the number of FinTech start-ups and scale-ups, almost a third of which are organizations that has chosen to expand its operations to the North East.
Sir Ron Kalifa, author of the Kalifa Review, says:
“I am delighted to see the publication of a FinTech growth strategy for the North East. In developing this 3 year strategy, the group of regional stakeholders who have worked with the Whitecap team have collectively delivered against a key objective set out in my review last year. I hope the new strategy will generate opportunities, secure investment and can help create jobs that will help the FinTech sector and economic prosperity in the region and the UK.”
Richard Coates, CEO of Whitecap Consulting, says:
“We are delighted to publish this strategy to support the future growth of FinTech in the North East. The key to successful implementation will be the way the region takes ownership of the actions and works together to deliver them. Our analysis shows that the growth of FinTech in the North East de the past 3 years have primarily been driven by expansion of the technology sector and success with inward investment in attracting new FinTech and technology firms to the region.”
Dr Henry Kippin, North of Tyne Combined Authority, says:
“Digital and the digital sector are a key component of our economic vision and our existing investments in skills, infrastructure and innovations aim to cement the region’s status as one of the most exciting digital economies in the UK and around the world. The recent success of the FinTech sector showcases the very best of North Tyne and the wider regional economy; collaboration between public, private and higher education, innovation across sectors and supply chains, and the clustering of expertise which is proving hugely attractive for inward investment. The work of Whitecap and partners brings these intangibles to life in a strategy with real clarity and ambition that we can and should all get behind.”
Rachel Burdis, Inward Investment Manager, Invest North East England, says:
“The North East’s growing FinTech community will greatly benefit from a regional strategy, focused on increasing business activity, funding and sector growth. We have supported this action-oriented Whitecap report, which highlights some of the priorities and prospects for this sector, as well as the ecosystem we have here. We look forward to continuing to work with local partners on this plan and championing the region while promoting the unique opportunities for investors.”
Dawn Dunn, Digital and Tech Lead, Invest Newcastle (part of the NewcastleGateshead Initiative), said:
“Now is the time to accelerate, grow and build on our strengths. To do that we needed a collective and defined strategy and I was delighted to play a part in this journey. The North East Fintech strategy is essential to the future growth of the sector and will support the development of our international strategy and position as a leading, collaborative and diverse FinTech cluster We have seen phenomenal growth and this strategy will support us to define the opportunity for investors within national and international markets – and promote the region as a place where fintech companies can not only start up, but scale at pace.This is our first step towards delivering a tangible strategy that will ensure the sector continues to create jobs, develop talent and attract inward investment. I look forward to the future as we continue to work together to support this high-growth sector to thrive.”
The strategy to develop the FinTech sector over the next three years is built on the foundation of qualitative in-depth research and insights from online surveys, and has involved consultation with more than 70 key stakeholders, as well as wider engagement via a session at FinTech North’s North East conference in Newcastle in July. It identifies three strategic priorities, each of which is associated with a set of recommendations divided into a total of 18 specific action areas. The three strategic priorities are linked to creating leadership, increasing collaboration and developing resources.
The report outlining the North East FinTech strategy can be downloaded from the Whitecap website here.
