The UK continues to produce fintechs competing on a global scale despite concerns over Brexit-related uncertainty, according to the latest edition of the Fintech100.
Climbing from fourth to second place, the UK is now the second most represented country in the list of companies which are “transforming” the financial services industry.
Twelve British firms were featured on the Fintech100 report, compiled by accountancy firm KPMG and investment firm H2 Ventures, an increase from eight businesses last year. Only the US is home to more, with 18 fintechs making the grade.
Durham-headquartered Atom Bank led the British contingent, ranking ninth globally, while challenger banks Monzo and Starling debuted in the “Leading 50” fintech firms around the globe.
China continued to dominate the top of the list, securing five of the top ten spots for the second consecutive year.
The annual report also showed a significant jump in global financial backing of fintechs, with the companies raising a combined $52 billion (£40bn) in venture capital, which is almost double last year’s figure.
In the 12 months preceding the report, the fintechs listed generated 366 per cent more capital compared to 2017’s entrants, raising a combined $28bn (£21bn).
The report is divided into two sublists: the “Leading 50”, for the most established fintechs; and the “Emerging 50”, for newer companies judged to be innovators in their sector.
Companies were selected based on five factors, including total capital raised, rate of capital raising, geographic diversity and sector diversity.
The final criteria, which the report calls the “X-factor”, judged the “degree of product, service and business model innovation” and was a measure only used in the emerging fintechs list.
The payments and transactions sector led the pack, with 34 representatives placing on the list, followed by 22 lending companies. Ten neo banks were featured, three of are located in the UK.
Anton Ruddenklau, global co-lead of KPMG Fintech, said: “The 2018 Fintech100 showcases the increasing diversity and scale of the global fintech market.
“Notable this year is the emergence of neo banks, with ten on the list – three of which are based in the UK.
“This is a great sign for UK banking competition and over the next five years Open Banking regulation will enable even more progress in the growth and competition of digital banking.
“Globally, payments and lending continue to be the dominant sectors, however wealth management is taking off, with 14 companies on the list and insurtech remains strong with 12 companies.”