The UK fintech industry is under pressure from a trio of threats including a shortage of skilled workers, Brexit uncertainty and decreasing investment
The UK fintech industry is under pressure from a number of threats. A long-term skills shortage that has hit the wider technology sector is believed by many experts to now be impacting the fintech industry. According to research from Harvey Nash, one of the UK’s leading recruiters in technology and finance, 65% of CIOs and technical leaders are suffering from a technology skills shortage.
Additionally, a report by Business Insider, which studied data from one of the world’s biggest job listing sites, Indeed.com, found that 31% of the mechanical and engineering project manager positions remain unfilled after two months.
The Harvey Nash and Business Insider studies come at a time of increased instability in the UK fintech sector. Adding to the skills shortage are pressures stemming from Britain’s impending exit from the EU, which has many in the fintech community extremely apprehensive about the future. Some estimates predict UK fintech job losses at 30,000 or more due to Brexit. The concerns center on passporting rights which allow companies to sell financial services to the rest of the EU.
There is also bad news on the investment front. A report by Innovate Finance and Pitchbook found that investment in UK fintech fell by 33% in 2016. According to the report published last month, the UK received $783 million in VC funding in 2016 compared to the $1.2 billion in 2015.
With a trio of threats including a skills shortage, Brexit uncertainty and decreasing investment, there can be little doubt that the UK fintech industry is under pressure. Despite these current threats, however, the UK currently maintains its position as one of the world’s leading fintech hot spots. Its dominance of the European fintech sector is due to a combination of readily available investment, good infrastructure and solid expertise. Whether London and the wider UK will continue to provide the same high level of opportunities in the years ahead remains to be seen.