Bristol & Bath FinTech - ECOSYSTEM REPORT 2019-2020
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Bristol & Bath FinTech
ECOSYSTEM REPORT 2019-2020
© Whitecap Consulting
Table of contents add region graphic
Bristol & Bath FinTech Ecosystem Summary 2
Forewords 5
Whitecap Consulting 6
West of England Combined Authority 7
Innovate Finance 9
TheCityUK 10
Hargreaves Lansdown 11
University of the West of England (UWE) Bristol 13
Bristol & Bath Region FinTech Ecosystem Research 2019-20 14
Definitions And Methodology 15
Overview 16 Research area:
Findings And Recommendations 21
This report focuses primarily on the
Availability Of Talent 23 activity in the geographical area
Strength Of The Overall Financial Sector 25 covered by the West of England
Economic Area and uses economic
Strength Of The Overall Tech Sector 27
data from this region, supplemented by
Case Study: Shaping FinTech Innovation for over 25 years 29 our own primary research.
Strength Of FinTech Startup/Scaleup Community 30
Relationship between Startup/Scaleups & Established
32
Financial Sector
Funding For FinTech 34
Thank you to the organisations who have supported and co-funded this research:
Case Study: Invest Bristol & Bath 36
Physical Spaces/Hubs 37
Interaction And Communication Between Key Players 39
Press & Media 40
The Role Of Universities 42
Participating Organisations 44
1
© Whitecap Consulting Published February 2020
BRISTOL & BATH
FINTECH ECOSYSTEM
- SUMMARY
2
© Whitecap Consulting
Bristol & Bath FinTech Ecosystem summary
Bristol & Bath region FinTech sector FinTech startups & scaleups
1,100,000 632,500 107 firms 40% established FS/
FinTech firms 28 firms, 86% B2B
population workforce employing
356people 57% B2C
61,000 4,340 34% Tech
firms 26% startups
scaleups
&
people working FS & Tech firms
in FS or Tech 43yrs 3 yrs
89% 3,402 average age
of founders
average age
of firms
75,000 4 people working
in established estimated FinTech
students Universities related roles
organisations
93% 79%
£33.5bn 2.1% £192.1m 2.9% have main office
in the region
are startups
GVA of UK GVA GVA (estimated) of UK FinTech GVA
FinTech in Bristol & Bath Bristol & Bath region highlights
1. Higher density of FinTech startups 5. The region has 14% female FinTech 1. Home to the largest digital cluster 6. Home to Hargreaves Lansdown, a
and scaleups than any other region founders – higher than all other areas outside London2. FTSE 100 listed FinTech with £102bn
researched outside London1. researched outside London. assets under management.
2. Two tech unicorns are based
2. Youngest average age of FinTech startups 6. University of the West of England (UWE) in Bristol - Graphcore and 7. More than 70% of the 500+
and scaleups (3 years old) of all regions has launched a FinTech MSc, developed OVO Energy. companies to have gone through
researched outside London. in consultation with the regional FinTech 3. Second highest density of financial the highly acclaimed SETsquared
community. services employment in England. accelerator programme to date
3. The South West has had more have been based in Bristol or Bath.
representatives in the FCA Sandbox than 7. Curve, voted the second most 4. Bristol has the highest productivity
any other UK region outside London (5). innovative FinTech in the UK in 2019, of all large UK cities.
has recently set up an operation in
4. Bristol is one of the few UK cities to have a 5. Amongst the British core cities,
Bristol, its first outside of London.
dedicated FinTech accelerator. Bristol has the second highest
number of business startups3.
1
To date Whitecap has also conducted FinTech ecosystem research in North East, Leeds City Region, Greater Manchester, West Midlands. 2
Tech Nation. 3
State of Bristol - Key Facts October 2019
© Whitecap Consulting
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© Whitecap Consulting 2019
FOREWORDS
5
© Whitecap Consulting
Whitecap Consulting
We are pleased to present our inaugural assessment Our analysis across all regions shows that the focus tends to
of the Bristol & Bath FinTech Ecosystem. Although the be less on startups, the supply side, and more focused on
the demand side, driven by established financial service
smallest economic region researched by Whitecap to
organisations seeking innovation and collaboration. This has
date, Bristol & Bath shows a higher density of FinTech
been driven by increasing competition, new technology,
startups and scaleups than any other region we have increased customer expectations and legacy IT systems;
reviewed and in real terms has more of these firms (28) reflecting the shift to a digital economy. In this region,
than considerably larger areas including Leeds City however, we have observed a volume of FinTech startups
Region, the North East, and the West Midlands. and scaleups that is proportionally larger than we have
seen in other regions.
In our role as a regionally focused strategy consultancy,
For established financial service organisations who have
we are exposed to many high growth sectors across the
evolved their systems and processes over time, it is increasingly
UK and have been actively involved in FinTech since we
Richard Coates, Managing Director difficult to operate efficiently and effectively in a digital
founded the company in 2012. Since that time, we have
Whitecap Consulting world. In contrast, the newer entrants have more of a flexible
worked with established financial services organisations,
strategy, ideally suited to an ecosystem-based approach
tech providers, FinTech startups and scaleups, universities,
and are well placed to exploit specific opportunities including
PE and Corporate Finance firms, the public sector and
developments such as Open Banking.
inward investment organisations on a range of FinTech
related projects. The issue of legacy technology in the financial sector is
not a new one, but the major change now is a move
FinTech provides a material economic growth opportunity
towards openness and the adoption of different operating
for the UK and for the Bristol & Bath region. On a national
models with multiple supplier relationships. The challenge
level, the sector is expected to create approximately
of adapting to this new digitally orientated operating
30,000 more jobs and over 1,600 new businesses by 2030.4
model is something that is a common theme in our work
According to Dealroom5, since 2013, European FinTech
with established organisations in the financial services and
companies have created over 2x more value than any
technology sectors.
tech sector in Europe. Additionally, the annual report from
Tech Nation6 in 2019 confirmed the UK remains global FinTech has evolved from disintermediation to
leader for scaleup investment into FinTech firms, generating collaboration, and within a few years it will be the way
£4.5bn in funding between 2015 and 2018. financial services is delivered. Also, the technology and
data competences that underpin FinTech are highly
London is a major centre of the sector on both a national transferable to other industry sectors; a key factor in
and an international basis, with an emphasis on startup regional economic development.
and business funding. However, the dynamic is quite
different in other parts of the UK, including the Bristol & Bath We would like to take this opportunity to thank all stakeholders
region, which is home to some long-established financial in the region who have helped us produce this report, which
4
UK FinTech – State of the Nation 2019, Department for International Trade services and tech businesses, as well as a growing startup hopefully will contribute to future growth in this exciting and
5
The State of European FinTech 2019, Finch Capital & Dealroom, October 2019 community. rapidly developing sector across the region.
6
UK Tech on the Global Stage - Tech Nation Report 2019
6
© Whitecap Consulting
West of England Combined Authority
The West of England is a vibrant and dynamic hub for The region hosts an exceptionally strong network of
innovation in professional services, FinTech brings together innovation assets. Our region’s exceptionally collaborative
our region’s talents to revolutionise the way that the sector and creative approach has resulted in ideal conditions for
operates and I’m very pleased to see this report setting FinTech start-ups and scale-ups. Many of these businesses
out practical recommendations that can make the cluster are scaling up to drive change at an industry level, both
here even more competitive. nationally and internationally.
The West of England’s growing FinTech sector is a great A stream of highly skilled graduates from universities in both
demonstration of the region’s national and international Bristol and Bath have played a key role in supporting the
importance as a centre of innovation. rapid growth of the region as a FinTech hotbed. Research
and teaching in Computer Sciences, Banking and Finance,
Cross-sectoral innovation is one of our Local Industrial
Business Management and Law, as well as digital-creative
Strategy’s core priorities, and the benefits of this are
Tim Bowles, subjects, fuels the ability of our region to sustain that growth.
evident in our region’s thriving FinTech ecosystem. The
West of England Mayor
West of England is home to the largest tech cluster outside The West of England Combined Authority plays an integral
of London, as well as a well-established professional services role in supporting the regional business ecosystem, by
sector, which employs 58,000 people – that’s 9.6% of total facilitating innovation and furthering sector development.
employment in the region. Building on sectors of this scale In addition to this, we offer extensive, tailored support to
and drawing on this deep pool of talent, it is no wonder our businesses interested in relocating and growing in our region
FinTech businesses are thriving. through Invest Bristol & Bath, the inward investment arm of
the West of England Combined Authority. For businesses
Another factor supporting FinTech businesses to flourish
already located here, our West of England Growth
is that our region nurtures high-productivity businesses.
Hub supports SMEs to innovate, scale-up and thrive by
Firstly, we are home to a network of Enterprise Zones and
connecting them to the support they need.
Areas which attract businesses and create jobs, as well as
a number of business incubators and accelerators. These As Mayor of the West of England, I am proud of the
innovation spaces provide employment space and support contribution we make, together with our community, to
to growing businesses - such as EngineShed and SETsquared, the continued success story of our region’s FinTech sector,
which is the global number 1 university accelerator. These and I look forward to a bright future ahead.
spaces offer a great platform for start-ups and scale-ups to
collaborate, innovate and grow.
7
© Whitecap Consulting
8 Photo credit: West of England Combined Authority © Whitecap Consulting
Innovate Finance
It is my pleasure to contribute to this inaugural report on to thrive, so it is vital that we continue to develop and
FinTech in the Bristol & Bath region. We have watched with adapt regulation in ways that create the right conditions
interest as the FinTech sector in the region has become for FinTech to prosper. To date, the UK is the best place to
increasingly prominent over recent years. start and scale a business – and we need to make sure that
remains the same for years to come.
We count a number of Bristol based FinTechs amongst
our membership and have been delighted to be invited Talent will accelerate growth across the FinTech sector,
to speak at seminars hosted by FinTech West, an so we need to ensure we continue to blend the skills
organisation we also now work with as part of the FinTech of finance, engineering and computer science that
National Network. have propelled UK FinTech to the top. This is of immense
importance as we enter the global race for talent and
Innovate Finance is the independent industry body that
access to the brightest minds in the space.
represents and advances the global FinTech community in
Charlotte Crosswell, Chief Executive, the UK. Our mission is to accelerate the UK’s leading role in Whilst London is acknowledged as the global epicentre
Innovate Finance
the financial services sector by directly supporting the next in the world of FinTech, other regions of the country play
generation of technology-led innovators. an important role in building a diverse and robust national
FinTech ecosystem - from Northern Ireland and Scotland,
The UK is the global leader in Fintech and over the past
to the West and North of England. We need to ensure we
decade, the country’s position as a trailblazing force in the
shine a spotlight on these regions to showcase their success
sector has been growing from strength to strength. Building
and contribution, to in turn drive further growth and attract
on our long-standing financial services pedigree, and
investment across all areas.
injecting it with innovation and transformative technology,
the results have transformed all areas of financial services. At Innovate Finance, we have recognised this potential and
the FinTech National Network has been established with some
The numbers speak for themselves. The innovation in
key partners to foster collaboration between national hubs
financial services has resulted in over 100,000 new jobs
and encourage innovators up and down the country. If we
across the UK, and the sector continues to attract record
can combine this network with local and central government
amounts of investment. In 2019 the UK FinTech sector
support, as well as access to patient capital to scale
retained its role as the top-ranking investment destination in
companies, the future of UK FinTech will be even brighter.
Europe, with venture capital and private equity investment
growing 38% year on year to a new record of $4.9bn, By connecting FinTech hubs across the UK, different regions
despite a year of political challenges and uncertainty. will be able to support each other and in turn encourage
national growth. This will form the basis to engage with
As a nation, we have embraced FinTech with open arms.
international markets as a united front, ensuring our
Our progressive regulation has encouraged innovation and
great reputation as a FinTech nation, and enabling us to
a large part of our success is down to just this. Innovators
continue setting the pace for the industry on an increasingly
and entrepreneurs need a framework that allows them
competitive international stage.
9
© Whitecap ConsultingTheCityUK
Bristol unites a heritage in financial and related The increasing recognition of Bristol’s industry hub is
professional services with a diverse and creative reflected by the firms it has attracted, and those it has
emerging technology cluster. These credentials have nurtured. The investment solutions firm Parmenion moved
not only established the city as a major hub for living, here in 2013, drawn by the access to local expertise in
working, and investing, but have also laid the foundations technology and finance. The community currency platform,
for a burgeoning FinTech community, which this report Bristol Pound, on the other hand, has grown locally, using
has estimated currently employs almost 3500 people and the Engine Shed as its base. We also have large, established
includes a growing set of startups and scaleups. players like Hargreaves Lansdown based in the city, where it
frequently collaborates with local firms to develop solutions.
Work-ready graduates and apprentices, local talent and
entrepreneurs, and specialists relocated from other major As TheCityUK’s City Chair for Bristol, my role is to promote
cities, all fuel the growth of FinTech in Bristol. This healthy the strength and opportunity of our industry cluster, and
Stephen Noakes skills pipeline has been strengthened by the availability and the wider contribution of financial and related professional
City Chair for Bristol, TheCityUK design of the courses on offer at universities in the city and services across the UK’s regions and nations. With local
Transformation Director, Retail & Community Banking across the wider south west region. The University of the members I have been identifying priorities to take forward
Lloyds Banking Group West of England’s MSc in Financial Technology offering is with policymakers, regulators and stakeholders.
a case in point.
To strengthen Bristol’s burgeoning FinTech community, we
Our working environment also fuels innovation and need to ensure firms can scaleup and expand rapidly. The
technology disruption. Local FinTechs and high-growth key to this is ensuring that we build deep talent pipelines,
companies have benefited from shared and low-cost ensure capital is readily available and make sure our
workspace offered in incubators and accelerators. Engine business infrastructure is flexible and affordable.
Shed and Runway East, among others, have provided
TheCityUK collaborates with industry members and partners
this kind of infrastructure, ensuring micro firms can scaleup
such as FinTech West to advance this agenda. There is
quickly. Large corporates also deliver critical infrastructure.
widespread support among civic leaders, educationalists
Oracle, for example, provides a specialist space in the city
and the industry itself to develop this ecosystem and I look
for entrepreneurs working with cloud technology.
forward to Bristol further building its reputation as a major
Collectively these assets – together with an excellent quality national and international FinTech hub.
of life offering – strengthen the FinTech ecosystem in Bristol
and make the city an attractive investment proposition.
Growing awareness of our strengths mean that Bristol is one
of the fastest-growing city regions in the UK, with the highest
density and most productive tech cluster.
10
© Whitecap ConsultingHargreaves Lansdown
Hargreaves Lansdown is pleased to support this research by And now of course we need to balance the advantages
Whitecap Consulting into the Bristol & Bath regional FinTech of proprietary technology with the increasing need to work
Ecosystem, and we have also been delighted to support with other companies. As we grow, we are learning that we
FinTech West’s programme of events over recent months. cannot be the best at absolutely everything and we are
exploring opportunities to work with other organisations. We
As a business, Hargreaves Lansdown is a success story, having
need increased capability to allow us to connect with the
reached the heights of the FTSE Top 50. But like so many other
outside world and provide additional ability to pivot towards
FinTech start-ups, we come from very humble beginnings
market opportunities as they arise.
and when our business started in Clifton back in 1981, the
investment industry was completely different from what we We see the increasing trend towards connectivity and
see today. ecosystems as a necessary evolution – or revolution – in the
business models of many financial services organisations.
Developing and growing an idea is one of the hardest parts
Being part of the Bristol FinTech scene enables us to build
of managing a business and single decisions can have long
Chris Hill, Chief Executive, networks and work with exciting technology partners that
lasting impacts that steer your company’s future. One of
Hargreaves Lansdown help us to stay at the forefront of our industry. We can learn
Hargreaves Lansdown’s biggest enablers for our ongoing
from other Bristol businesses and they can learn from us – that
success and ability to continue to provide the exceptional
we really value.
client service that we pride ourselves on is our technology.
Today we have over 350 colleagues working to maintain, One of our key values is to ‘Do it better’ and we feel this is
develop and innovate our technology, and it is the security, reflected well by the city that we are based in. Bristol is a
resilience, change, and continuous improvement that they collaborative and innovative city that is always looking to
deliver that underpins our success. take the next step forward. The “Bristol: One City Approach”
is an initiative to develop a shared vision for Bristol to 2050,
For all FinTech businesses, the challenge that comes with
bringing together participants from business, the public
success is scalability, specifically how to grow operations
sector, voluntary organisations and communities. Its objective
and processes in a controlled way that doesn’t compromise
is to give a longer term, joined-up approach which better
the ability to provide outstanding client service or introduce
involves local people and businesses. We participated in
unwarranted risk into the business. Historically Hargreaves
the development of the initial plan, which was published
Lansdown has retained ownership of its IT systems where
in January 2019 and will continue to support this moving
other platforms have outsourced, or in some cases sought
forward. Hargreaves Lansdown is firmly rooted in the Bristol
to replatform, in order to ensure that scale and operational
community and is keen to add its voice and participation
efficiency are optimised. Hargreaves Lansdown’s retention
into the future vision for this great city.
of its IT infrastructure has provided a significant competitive
advantage in allowing us to prioritise the business changes If you are a startup, or you have an idea that you are trying
that we want to make, and how we want to make them, to develop that you think might be relevant to Hargreaves
allowing us to react faster than the competition when Lansdown, then please contact David Henderson, our Head
opportunities arise. As IT ages and systems become more of Transformation.
complex, it is a constant challenge to retain that agility.
11
© Whitecap Consulting12 Photo credit: Hargreaves Lansdown © Whitecap Consulting
UWE Bristol
The University of the West of England (UWE Bristol) is DIPS is an ambitious programme of work that will connect
delighted to be supporting this important research from the region’s Professional Services industry with research
Whitecap Consulting which demonstrates the great things excellence in digital technology and effective leadership &
happening around FinTech in the West of England and management practices, harnessing connectivity between
the potential our region has to become a global leader in the creative, engineering and technology sectors, which
digital innovation. are so unique to our region.
Through our education, research and enterprise, UWE Bristol+Bath DIPS brings together one of the UK’s largest
Bristol creates jobs and opportunities, positively impacting clusters of banking, finance and law, outside of London,
our region and empowering people from all backgrounds with a hub of emerging FinTech/LegalTech businesses
to fulfil their potential. Our wide-ranging network of to generate a critical mass of activity that will sustain
stakeholders and partners – across high growth companies, productivity and growth.
Tracey John, Director of Research Business multi-nationals, public service providers and third-sector
Our DIPS programme will lead delivery of WECA’s Local
and Innovation, UWE Bristol bodies – offers our students and staff unique opportunities
Industrial Strategy’s focus on FinTech/LegalTech, which
to help shape the future. With over half of our graduates
represents one of four innovative sectors that will create a
each year going on to work in and shape the region,
West of England Global Centre of Innovation Excellence.
we are truly powering the future workforce, building
Together, we are building a powerful consortium that
sustainable and engaged communities and boosting the
includes large and mid-tier law and accountancy firms,
region’s standing on a national and global stage.
global banks, the region’s universities and emerging
The Bristol & Bath region is a major focus for next- technology businesses.
generation, tech-enabled financial, legal and business
FinTech West is an incredibly important member of the DIPS
services. The vision to establish Bristol & Bath Professional
consortium and we are grateful for all their commitment
Services as global leaders for digital innovation and
and support. We are thrilled to be working with such a
inclusive growth by connecting, scaling and investing in our
strong and committed group of partners on DIPS to address
research & innovation, technology and industry strengths
the barriers to productivity and inclusive growth facing
is powerful and achievable. That is why UWE Bristol is
the region, and to put Bristol+Bath on the map as a global
working in partnership with the West of England Combined
leader for digital innovation in Professional Services.
Authority (WECA) to establish Bristol+Bath Digital Innovation
in Professional Services (DIPS).
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© Whitecap ConsultingECOSYSTEM
RESEARCH
2019
14
© Whitecap ConsultingBristol & Bath Ecosystem Reseach 2019
Over the course of recent months, we have conducted Definitions and methodology established financial services or tech is working in
an analysis of the FinTech activity in the region, which has FinTech. We have conducted primary research
included interviews, focus groups, an online survey, desk FinTech can be defined as the application of to establish the number of jobs within FinTech
research, and insight gathered across various events, technology to improve financial products and startups and scaleups and have adopted a proxy
meetings and the course of our ongoing consulting services. methodology to estimate overall FinTech sector roles
engagements in FinTech across the UK. within the three categories listed above.
This makes it a very broad category, in which it is
Via a combination of interviews, discussion groups, events acknowledged to be extremely challenging to
To calculate the FinTech workforce and GVA we
and an online survey we have engaged with around 200 categorise companies and jobs, especially in the
have adopted the following methodology:
people over recent months to ensure we are able to put absence of standard measures such as SIC codes.
forward a considered, well informed and data rich report • Estimated FinTech workforce = 5% of combined
In this report we have differentiated between three FS workforce (derived from TheCityUK data)
which can serve as a building block for the evolution of the
different types of companies directly operating and tech workforce (derived from Tech Nation
FinTech sector in the Bristol & Bath region.
within the FinTech sector: data) in the research area + all identified workers
We are grateful to everyone who has contributed, and in • FinTech startups and scaleups - pure FinTech within FinTech startup & scaleup firms (Whitecap
particular to our sponsors and partners who have made business models, often with a focus on disrupting primary research).
this work possible when it was not centrally funded or the sectors they work in.
• Estimated regional FinTech GVA = estimated
commissioned: • Established Financial/FinTech - established FinTech workforce X GVA contribution per worker
entities, offering financial products or services. (using UK average).
• Tech firms - businesses operating in multiple In the absence of any current publicly available
markets (must include serving financial services estimate, the 5% estimate is based on a broadening
or FinTech).
of a previous EY estimate from 2015 which suggested
Categorising jobs within FinTech is also challenging, 5% of the FS sector is categorised as ‘FinTech’.
as it is not the case that everyone working in
Report authors:
Research & support team:
Julian Wells Stuart Harrison Daniel Ryan
Director & FinTech Lead Associate Director (South West) Jake Fox
Whitecap Consulting Whitecap Consulting Emma Harrison
15
© Whitecap ConsultingOverview Current status
The Bristol & Bath region is a vibrant and close-knit region where FinTech is being The region has core strengths in the financial services sector, including retail
enthusiastically welcomed and embraced. It shows a higher density of FinTech banking, insurance, share dealing, asset management and ethical finance.
startups and scaleups than any other region we have reviewed, with more of these
Creative arts and media are core sectors in the cities of Bristol & Bath with South
firms (28) than regions with two or three times its population.
Gloucestershire being recognised for advanced engineering, aerospace and
The city of Bristol is not only easily accessible from London (as little as 70 minutes by microelectronics.
train), there is a sense it is also more culturally aligned to the capital than other regional
On a national level, the region is often considered a location where tech thrives,
cities, particularly for the tech and FinTech sectors. Being known as a forward-thinking
evident throughout the research process that supports this report, both in terms of
tech-focused location, it has been found to be the only non-capital city in the UK more
the narrative and sentiment of the people we interviewed, and the analysis we
productive than expected for its size and potential7.
conducted.
The region offers many lifestyle advantages, including being within good reach of the
There is certainly a close-knit tech community with a strong focus on inclusion and
South West and Wales. Compared to other UK cities Bristol & Bath are not part of a
diversity, which reflects on the FinTech ecosystem. 14% of FinTech founders/leaders in
major conurbation but this brings advantages including a close knit and collaborative
the region are female, which is higher than any other region we have researched to
community across the cities and wider region.
date, although it should be noted that the EY UK FinTech Census 2019 found that 25%
As is the case for other regions of the UK, it is important the Bristol & Bath region of FinTechs have at least one female co-founder.
develops its FinTech proposition to be shared nationally and internationally, and to
According to Whitecap’s analysis of media coverage over the last 3 years, Tech is the
help drive economic growth and prosperity from what is now the strongest sub-sector
word most commonly associated with FinTech in Bristol. Although this was true of all five
in the UK’s technology industry8.
regions we researched, Bristol was 20% higher than the overall UK average, highlighting
As at the end of December 2019, there were 666 active high growth businesses in that Bristol’s Tech strength shines through in FinTech
the region, with the top three ‘buzzwords’ they are associated with being Artificial
Taking into account its core strengths in tech and financial services, it is perhaps no
Intelligence, Internet of Things, and FinTech9.
surprise that FinTech is an emerging area of focus in the region. What is clear from
our research, however, is that the FinTech sector in the region is currently emerging
primarily from the entrepreneurial startup community rather than the established
financial sector.
7
Queen’s Speech November 2019
8
UK Tech on the Global Stage, Tech Nation Report 2019
9
Beauhurst
16
© Whitecap ConsultingFuture potential Attitude towards FinTech
The proximity to London makes the region a strong candidate for established There is a positive and enthusiastic attitude towards FinTech in the region, and the
FinTech firms expanding regionally from London, a development which is becoming sector seems to have drawn confidence from its proximity to London. Many of
increasingly common as the sector matures. Curve, voted the second most the FinTech entrepreneurs in the region have lived or worked in London and have
innovative FinTech in the UK in 2019, has recently created over 30 jobs in Bristol. good connections into the ecosystems via their links to organisations such as
The region would benefit from more involvement from the universities and the large Innovate Finance.
financial services organisations. Unlocking the FinTech potential in the major financial
The stakeholders we interviewed had a positive view of the impact FinTech can
organisations in the region is an area of opportunity which could lead to economic
make on the region and we found the Bristol & Bath region to be extremely strong
growth in the form of new jobs and new businesses, not to mention providing a new
career option for the thousands of financial services employees in the region. in FinTech vs other regions, particularly in terms of the size and strength of the startup
and scaleup community, despite a commonly held view that Bristol is behind other
The financial services industry continues to undergo a period of significant digital regional cities.
transformation, which is redefining some of the requirements of its workforce. The
region has strengths in banking, investment and insurance, each of which could The first Bristol Technology Festival was held in November 2019, when 42 events across
be sources of innovation and digital change which could position the region as a 22 venues attracted around 4,000 attendees. It was an impressive achievement
hotspot of innovation. for the first year, which emphasises Bristol’s collaborative spirit and ability to come
The FCA has said it is keen to stimulate developments that respond to the challenges together to work towards common goals that promote the region.
of climate change and vulnerable customers, an area the region seems to be Hargreaves Lansdown is regularly quoted as the best example of a large organisation
well aligned to become even more heavily involved in, both in terms of its FinTech actively engaging with the FinTech and tech community, and has been visible at
involvement and also the broader cultural environment in the city and region.
events and in helping drive forward initiatives such as the Bristol Technology Festival.
Bristol & Bath is not currently specifically represented by a HM Treasury FinTech Envoy. If every significant financial services organisation had someone in an external facing
Whilst there is no evidence to suggest this is holding back the region’s progress, it role with a focus on FinTech, it could potentially make a significant difference.
represents a missing link to the London FinTech scene and a missed opportunity
to connect with the UK-wide network of Envoys. As with other regions, there are
challenges with the supply of appropriately skilled talent at the current time but high
growth sectors will always have resource shortages so this should not be classed as a
weakness of the region – more of a growing pain.
17
© Whitecap ConsultingStakeholder quotes - key growth opportunities
“Bristol has some of the best people I’ve ever worked “It’s all about commercial traction and gaining “There is more we can do to promote the amazing
with. I’ve been in Bristol for the last 20 years and the critical mass.” things happening in the South West. From a FinTech
creativity, attitude, and technical skills are superb.” Nicky Cotter / Florian Depner – ICON Corporate Finance angle, FinTech West has helped put our regional
Gareth Williams, Founder & CEO, YellowDog strength in FinTech, on the map. We need to attract
“Being a unique place with brilliant universities and more companies into the funnel and it will be good
“It’s more of a regional thing than a FinTech thing but excellent research lends itself to great opportunity. to see what can be achieved with a stronger FinTech
the success of the first Bristol Tech Week shows what We are well poised to achieve good success at this focus in the region.”
can be achieved when people come together, so moment in time. There seems to be the will to make it Vicky Hunter, Entrepreneur Engagement Manager,
we need more of that generally and FinTech West will happen and continued support from WECA.” Tech Nation
obviously play a key part.” Tracey John, Director of Business, Research & Innovation, UWE
Jack Thompson, Founder, Ginkgo Business Development
“We expect momentum to build as institutions seek
“The FinTech scene in Bristol is an accelerating and to grow and broaden their exposure. The UWE FinTech
“We’re really positive about the region, and it has thriving community of like-minded individuals with an MSc is early evidence of the building of experience
the benefit of being close to London. People seem to enthusiasm to collaborate and share but is in the early and accumulation of relevant skills.”
Alan Platt, Partner, DAC Beachcroft
have time for you here whereas in London you feel like stages of forming into a tangible market. I don’t get
a tiny fish in a big pond.” the sense there are large numbers for FinTech firms
“The West of England is the best place for innovation
Georgia Stewart, Co-Founder, Tumelo forming – really we need to encourage and support
and creative collaboration across sectors and
more FinTech innovators in Bristol.”
communities. The West of England Combined
“As a region we “punch above our weight”, so just Martin Palmer, Marketing & Business Development Director,
Clarke Willmott Authority made it its strategic priority to support
need to expand on what we do already. FinTech West
regional FinTech’s cross-sectoral innovation capability.
has been instrumental in making it happen.”
“We should aim to become a national and global The sector finds open networks, a supportive
Nate Stott, Co-Founder, Sixty
recognised centre for FinTech but it won’t be easy. As innovation ecosystem and a full range of financial
a region we still need to crack our elevator pitch and services providers keen to collaborate, all set in a
“We need a healthy balance of a number of regional
make our voice heard further afield. FinTech West and thriving and well connected future facing region
champions, the Ultraleap and Graphcore of FinTech.
activities such as Bristol Tech Festival are great examples recognised globally for its innovation excellence.”
Satellite offices of financial services businesses need to
be influencers and not just outsource operational tasks.” of Bristol’s collaborative approach and we need to Dagmar Steffens, Head of Sector Development & Innovation,
continue to build on these to raise the profile of the city.” West of England Combined Authority
Marty Reid, Head of Engine Shed
David Henderson, Head of Transformation, Hargreaves Lansdown
18
© Whitecap ConsultingAreas requiring the most attention over the next 2-3 years Biggest obstacles to growth of FinTech in the region
“I believe the enabling infrastructure in the West needs to make some choices if it “We need more clarity and support around high value tech areas including
wants the West to be a world class hub for innovation. London has the luxury of size paid internships and apprenticeships. To join up experience and training better.
to accommodate many different innovation areas at scale, but the West does not.“ Help startups and scaleups really succeed rather than just end up bought by
Patrick Vandesteen, Founder, Zodus the big guys.”
Marty Reid, Head of Engine Shed
“We don’t get out of the region and promote it enough. There are some small
projects but we need more. If we really want to flex our muscles nationally or “The West and the rest of the UK need to try and break the mindset that London
internationally then we need a co-ordinated brief and plan.” is the centre of all things Fintech. Success stories and attracting investment will
Jack Thompson, Founder, Ginkgo Business Development help, but also the national bodies need to do more to promote and engage
across the UK.”
“To put FinTech on the map, we really need a super star company in the region (like Gareth Williams, Founder & CEO, YellowDog
Parmenion for WealthTech and Immersive Labs for cybersecurity) and foster ties with
the City of London more broadly.” “Operations such as FinTech West would benefit from being supported propertly
Nicky Cotter / Florian Depner – ICON Corporate Finance through regional funding and support. We have all the infrastructure here we need
in order to compete with any region in the UK or globally.”
“Bristol organisations need to be able to compete against London. There’s an Paul Jones, Senior Manager, UK Network Team, British Business Bank
opportunity for Bristol to sell the benefits of growing outside of London, but I’m not
sure Bristol has yet articulated what it has to offer that is unique or different. The Bristol “In professional services, as in financial services (and more widely), we are thinking
story needs to be stronger.” hard about skills. We will be looking to get our people trained in data and tech as
Martin Palmer, Marketing & Business Development Director, Clarke Willmott well as commercial and legal skills. Professional and financial services will always
involve people but what may change is what will they be doing.”
“The region needs to be renowned for innovation, talent development , access to funding Alan Platt, Partner, DAC Beachcroft
and ease of business development ; a collaborative environment which allows synergies
between sectors and generate innovation through cross disciplinary applications.”
Debbie Sturge, Bristol Business School, UWE
“Collaboration is in Bristol’s DNA and, and as it’s a small city, people know each
other and talk – it doesn’t feel like there’s much competition. However, there’s
always more we can do and I’d love to see more between the city, the tech and
high growth business sectors and the more deprived parts of the city.”
Gareth Williams, Founder & CEO, YellowDog
19
© Whitecap Consulting20 © Whitecap Consulting Photo credit: FinTech West
Findings and recommendations
Key findings Recommendations Key stakeholders
Talent • Strong pool of financial services and tech • Encourage established organisations in financial • Public sector
talent, as well as creative skills. services/FinTech/tech to be more accepting of
• Major employers
placement/apprenticeships to make graduates (and
• Bristol & Bath benefits from an inflow of
non graduates) more relevant. • Universities and colleges
talent from people relocating from London.
• Promote the region’s FinTech jobs/skills opportunities
• Shortage of certain tech skills, particularly
to skilled workers in other regions, especially London.
developers.
Established financial • The sector is dominated by large firms • Established organisations should take a more external • Major financial services firms
sector across insurance, banking and wealth facing position in the regional FinTech community,
• Regional tech/FinTech
management. which could include speaker slots at events or running
community
competitions or initiatives involving collaboration with
• Most of the large firms are not visibly
regionally based FinTechs / entrepreneurs. • Inward investment
involved in FinTech activity within the region.
organisations
Tech sector • Very strong tech sector across multiple • Continue to use the tech strength of the region to • Major tech employers
disciplines, with Bristol & Bath particularly build the FinTech story, as it is tech skills which help
• Regional tech bodies/
recognised for digital and creative. build the businesses that FinTech entrepreneurs see
clusters
the market opportunities for.
• Regionally strong sectors also include
aerospace, robotics, “deep tech.” • Position the region as a tech hub for FinTech.
FinTech startups/scaleups • The FinTech startup and scaleup sector has • Increased promotion of the benefits of the region as • Public sector
flourished in the last 2-3 years, becoming an expansion base for established FinTechs looking to
• Regional tech bodies/
disproportionately large when compared create additional offices outside London.
clusters
to other regions.
• Increased FCA/expert involvement in the FinTech sector
• Operators of physical hubs/
• The south west has had more representatives so innovation can focus on benefit to the customers whilst
co-working spaces
in the FCA sandbox than any other region having an awareness of regulatory restraints.
outside London (5 to date).
Relationship between • The majority of the established financial • Encourage established firms to have more • Major tech employers
financial sector and services firms are not actively engaged involvement and conversations with the startups,
• Regional tech bodies/
FinTechs with the FinTechs in the region. including giving them guidance on how to engage
clusters
with them effectively.
• FinTech firms would like to understand how
• Tech/FinTech communities
to engage with the large financial services • Consider ‘reverse pitch’ style events where established
organisations. firms share their challenges and startups/scaleups pitch
their potential solutions.
21
© Whitecap ConsultingKey findings Recommendations Key stakeholders
Funding for FinTech • Early stage funding is available in the • Enhance the links between funders and FinTech • Funding community
region but can be hard to find. innovators, by providing more clarity around the
• Public sector
FinTech funding options available in the region and
• FinTechs who have raised funding tend
how they can be accessed. • Tech/FinTech communities
to focus their efforts on London.
• Provide support and guidance to FinTechs who do
decide to look to London for funding.
Physical spaces/hubs • Bristol is one of the few UK cities with a • More hub spaces in the region could take on a • Universities
dedicated FinTech accelerator. FinTech angle, to differentiate from the co-working
• Major financial and tech
/ serviced offices.
• There are numerous shared spaces for organisations
startups across all sectors, with a strong • Potential opportunity for an operator of such a hub
• Current & potential hub
tech focus. to expand from London to Bristol.
operators
Interaction between key • FinTech has been embraced by the • Continue to find angles via which to embed • Regional tech bodies/clusters
players startup and scaleup community, FinTech into the broader tech sector.
• Tech/FinTech communities
with FinTech West events providing
• Ensure a strong FinTech presence in Bristol
a focal point.
Technology Festival 2020.
• Interaction with the major financial
services organisations is not currently
commonplace
Role of the universities • Good intent and taking action to • Take steps to bring startups and academia • Universities
improve engagement with business but together to explore how they can meaningfully
• Major tech employers
considered by many to be challenging collaborate and support each other.
to engage with. • Regional tech bodies/clusters
• Embrace the FinTech courses available in the
• Business engagement is currently geared region, raising awareness with students and across • Tech/FinTech communities
towards larger corporates. firms of all sizes in and outside the region.
22
© Whitecap ConsultingAvailability of talent
Our research shows there is a strong pool of raw help support FinTechs and other emerging technologies
Strong pool of financial services entrepreneurial and tech talent that is gradually finding by accelerating technical and business learning and
and tech talent, as well as problems to solve in the FinTech space. cross training existing staff.
creative skills The large financial services organisations in the region are Outside of technical and entrepreneurial skills, there
major employers and acts as a strong training ground doesn’t seem to be an abundance of talent in the
for inexperienced employees. This is an important part of the compliance field. This is not required for most of the
Bristol & Bath benefits from an inflow ecosystem and can become an increasingly rich source of FinTech FinTechs at this stage but will become so as they grow.
of talent from people relocating from workers, as well as FinTech entrepreneurs, although it appears to This compliance skillset is also not easily accessible via
have little impact with regard to FinTech talent currently. consultancy other than through legal practices in the
London region (as compared to the consultancies that exist as
For startup businesses, hiring is not a significant issue in the
part of the compliance scene in London).
early days of operation as the businesses tend to draw
primarily on the founding team. Skills become more of The regional universities produce large numbers of
Shortage of certain tech skills, an issue once these organisations receive seed funding potentially relevant part-time students and graduates
particularly developers and need to start hiring. At this point, the startups have to through courses such as computer science, yet they
compete with established employers who can offer more are often overlooked, particularly by more established
attractive monetary packages while the startups may need businesses. There is currently a lag in specific FinTech
to focus on a wider range of elements such as share options, programmes at postgrad level however this is changing
working for a purpose and generally being a “cooler” place rapidly with considerable growth expected in this area
to be. Of course, the “type” of person attracted or suited to over the next two years.
a startup may not be the same as a person happy to work
Further talent streams could be developed through new
for a corporate.
undergraduate programmes. Colleges such as Weston are
As with the other regions, the talent pool in Bristol & Bath also active in this area and some growth in apprenticeships
tends to be domestically focused, whereas in London there should also support further talent development. But, further
is a more internationally diverse talent base. It is estimated collaborative work across education sectors is required to
that 42% of FinTech workers in the UK are from overseas10, develop the right skill set for digital careers.
illustrating the current strength of London in this sector.
Although the region prides itself on a very positive attitude
Organisations expanding into the region and seeking to and approach to diversity and equality, and does well
rapidly hire skilled staff can burden the ecosystem although compared to other regions, there is still the need to address
it is a necessary unintended consequence to succeed in these issues, including work with deprived areas to fully
attracting businesses to establish themselves in the region. utilise the potential FinTech workforce.
Several organisations are looking to shape academies to
10
UK FinTech – State of the Nation 2019, Department for International Trade
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© Whitecap ConsultingStakeholder quotes
“There are many technical and back office skills “Access to talent and funding are repeatedly quoted “What’s challenging in Bristol is the competition for
in the region but how many are entrepreneurs? as the biggest challenges to businesses across the great people. More and more quality companies
Similarly, there are plenty of people employed in country. We need to look at new ways of finding and are setting up here which is meaning that attracting
financial services but are they the ones that are nurturing junior talent, to bridge the gap and ensure the best people to your business means you have
innovating? Of course, many of the companies are there is high quality, better representative, senior to be clear on what your value proposition to those
competing for technical skills, you would expect that, talent for the future.” employees needs to be.”
but different roles will appeal to different people.
Vicky Hunter, Entrepreneur Engagement Manager, Tech Nation Gareth Williams, Founder & CEO, YellowDog
There will be more cross fertilisation as the sectors
mature, e.g., data science and FinTech.”
“There is a lot of good talent and interesting places “There’s good talent in the region and you can easily
Marty Reid, Head of Engine Shed
to work. FinTech is making financial services a cooler hire but you have to put thought into it, engage
“We have built an amazing, pretty diverse team, in place to be and a more interesting place to work. with the community and have a good package
terms of gender, age and life experience at least. There are good senior people but perhaps a lack of as a total, can’t just rely on money. There are also
It is a lot of work to find the right people and to get 1 or 2 year experienced people, although plenty are some good coding academies and there’s plenty
them on board, but generally speaking it has not emerging from university.” that come out of the universities. The startup scene
been a problem for us. People do seem to be more Alex Cosgrove, Principal Consultant, Data, Insight & Analytics, is perhaps less relevant for graduates but when
expensive if they move from London though.” ADLIB you reach 10 staff you should have a junior talent
Georgia Stewart, Co-Founder, Tumelo pipeline. We’ve now got 12 people in Bristol plus
“My impression is of lots of growth with new financial equivalent in London and a team in Beijing.”
“It’s about being attractive as an employer - you Adam Jones, CTO & MD of Technology, Redington
services companies moving into the region and
have to make yourself appealing. As a consultancy
we have an exciting proposition with the opportunity existing companies building new provision in this field,
to work with a lot of different tech for some of the but all fishing in the same talent pool may cause
world’s best-known clients, on engagements that are some blockages.” Debbie Sturge, Bristol Business School, UWE
really transformative.”
Stuart Bullock, Managing Director, BJSS “Our conversations with industry reveal the gaps
and the work needed to be done around inclusivity,
“Larger companies can dominate resource, equality and diversity. There are enough people but
especially new entrants to the market initially. At HL perhaps not enough specific skills available and the
we have offshored some development as there can whole talent supply chain needs to be considered.
be great skills readily available (e.g. Warsaw). When We are lucky to have Fintech West as a key contact
recruiting you need to be considerate of the market and networking point.”
and availability.” Tracey John, Director of Business, Research & Innovation, UWE
David Henderson, Head of Transformation, Hargreaves Lansdown
24
© Whitecap Consulting25 Photo credit: travellight 2011 Grimshaw Architects © Whitecap Consulting
Strength of the overall Financial sector
The financial services sector is the most significant of the • LV= - one of the UK’s largest personal insurers has a
The sector is dominated by a West of England’s priority sectors in terms of employment, base in the region and has established a partnership
number of large firms with the core strengths of the region predominantly in with University of Bristol including an office at the
insurance and banking. university which is intended to house 20 staff.
The financial services sector in the region is dominated by • NatWest/RBS – has 100+ technology development
a number of large firms including Lloyds Banking Group, staff in Bristol.
NatWest/RBS, Axa, Hargreaves Lansdown, Aviva, Cornhill
There has always been a strong financial services sector
Direct, Computershare, LV=, DAS UK Group, Bank of Ireland,
with a lot of jobs, but the large organisations have moved
and Triodos Bank. There is a sense that the sector is big
slowly. Therefore, the region has not been seen as a natural
Insurance, banking and but currently quiet, with the larger organisations generally
centre of financial services innovation. One of the factors
wealth management are uncollaborative with one another.
behind this has been that the decision-makers have tended
strong in Bristol & Bath There are some organisations championing the FinTech to be in London while many of the roles in the region are
sector however they are not seen as significantly exposed to “back office”, although this has been of great benefit for
the regional FinTech scene. In particular, found the existence employment in the region.
of, and strength of, the existing financial services sector
In general, there now seems to be a growing interest in
has had little impact on the foundation and growth of the
FinTech companies, technologies and jobs outside of
FinTech scene in the region. This is a missing opportunity as
London, and clearly with its strength in technology and
Most of the large firms are contact and collaboration with established financial services
financial services and close proximity to London with a
businesses is of interest to most FinTechs.
not visibly involved in FinTech high quality of life, the region stands to benefit.
activity within the region Some of the notable activity in the region includes:
One example is ClearBank. Launched 3 years ago,
• Lloyds Banking Group - one of the region’s top five ClearBank is the UK’s fifth clearing bank and works
employers within excess of 3500 employees. with FinTechs and others to help them offer payment
mechanisms via its Banking-as-a-service proposition. It
• Hargreaves Lansdown - a significant financial
is the only bank that is 100% cloud based. ClearBank is
services organisation that is centred in Bristol. Having
growing outside London, with all customer service now
been founded in Bristol 28 years ago, it now has
run from Bristol.
1.2m customers and over £100bn of assets under
management.
• Computershare - operates the largest share registration
business in the UK from its Bristol base, and there are also
significant administration functions in the region for the
investment and insurance sectors.
26
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