Investment in UK financial technology (fintech) was seven times higher in 2021 than in the previous year, boosted by a record number of deals. There were 603 private equity, venture capital and merger and acquisition deals in the sector in 2021, compared with 470 in 2020 – a 28% increase. There were a significant number of large deals, including the $14.8bn Refinitiv deal in January 2021, when the London Stock Exchange took it over. The UK remains at the centre of European fintech investment, with British fintechs attracting more funding than their counterparts in the rest of EMEA [Europe, Middle East, and Africa] combined. It is vital that the ongoing work to nurture them continues if the UK is to remain a magnet for investment.
Total global investment in fintech reached $210bn in 2021, with $88bn into the US, the largest global fintech sector. The EMEA fintech market also performing strongly. In the region, $77bn was invested in fintech last year, with record levels of investment the Nordics ($18.5bn), Germany ($5.4bn), Ireland ($1.6bn), Africa ($1.8bn) and Israel ($900m). Globally, payments fintech accounted for nearly a quarter of total investment, at $51.7bn in 2021, compared with $29.1bn in the previous 12 months. KPMG said the payments segment of fintech was boosted by increasing interest in offerings such as buy now, pay later, and open banking-based products and services. Digital transformation in financial services is currently at a tipping point, with technology being used to empower banks, payments businesses and financial institutions all over the globe.