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London wins the fintech wars [#SIBOS]

One of the other big things that cropped up this week is London versus New York as a financial centre.

That always crops up as a subject, but there’s an interesting new ring to the conversation, which is that New York will naturally fall behind because London has its technology hub and financial centre side-by-side. New York doesn’t have that advantage as the technology centre is six hours away on the West Coast in Silicon Valley.

It is certainly true that America has divided its resources between East and West Coast, but does that hamper innovation? Does that constrain their fintech capabilities?

Some would say absolutely yes. For example, when we look at where all the fintech dollars are going into start-ups, a third is going into Silicon Valley but $1 in every $6 is going into London, and its doubling year on year fast.

London has just launched Innovate Finance, a nurturing centre for developing fintech businesses, along with Level 39, the hotspace for fintech innovation. In East London, banks like Barclays are mentoring new startups in cryptocurrencies, and we see a true integration of finance and technology.

Do we see that in New York?

No, as all their innovation is over 2,500 miles away in San Francisco.

Am I baiting the debate here?

Yes.

Is there a real cause for celebration in London?

Yes.

As banks become technology companies, having the banks and the financial technology innovators all sitting together is truly going to make London the financial centre of the world for the future.

I’ll be interested to hear if anyone wants to argue the view however.

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • London is a great place. I love it. It lacks a few things technological: 1. It is not clear where top computer science grads come from here. City University, University of London, Imperial, Bristol, Birmingham… all very good. As is Reading. There is not obvious research leader in computers/technology. 2. There is still an Oxbridge view that physics and math are better subjects to study than computer science for a job in the City. I think nothing is further from the truth. 3. London is just getting started with its Maker community and MakerSpaces. There is a lost culture here of people who diddle with gadgets. Raspberry Pi is terrific. 100 more of those would be awesome. 4. London doesn’t have a technology press. Having a page in a daily is not a technology press. There should be free dailies at the train stations, etc. with jobs, gatherings, users groups, etc. Nerd culture here is a bit 19th century. Finally, London lacks fintech leadership in the hot areas of AI, machine learning and massive data research. The banks really don’t explore this enough. I’m a fan. I’m hopeful. Not sure what difference beating NYC or anywhere else makes. What is key is being the leader. Screw playoffs. Let’s leave the others in the mirror. There are some hot start-ups in Fulham, etc. but there is far from a start-up culture. No young British hot shots think it is cool to build a big firm. They all want to work for one that is 150 years old. Ultimately, the most important driver for London will be cheap space where companies can grow and build awesome cultures for innovation. That was Reading for a while, then the Oxbridge corridor, and then East London. Now it is far from obvious where it is to be located.

  • An interesting article that failed to mention the other Financial Services centres in the UK which also have strong technology offerings to assist in the development of new High Growth Fin Tech companies. The Scoool of Informatics at the University of Edinburgh, for example, is a leading world class institution that supports innovative new technologies and which introduces high growth start ups to funding opportunities, mentors and the like. The recently established Data Lab initiative in Scotland seeks to ensure that world class academics assist leading industrialists in making the most from “Big Data”. And all this in the same time zone and a cheaper location than London. So yes London may be winning the Fin Tech wars but the regions can really assist it in maintaining this position