Why Leeds City Region Is The Obvious Choice For FinTech Businesses

· Ali Turner · Business

FinTech businesses are thriving in Leeds City Region.

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As the UK’s second city for financial services and a thriving tech hub, Leeds City Region is the future of FinTech.

Technology has turned the financial services sector on its head, revolutionising processes and creating exciting new possibilities. According to Innovate Finance, UK FinTech companies attracted $4.1 billion (£3.5 billion) of investment in 2020. There’s no doubt about it – FinTech is the sector to watch. And there’s no better place to base your business than Leeds City Region. Here’s why…

Financial services is our bread and butter

Leeds Building Society Office

It’s no secret that Leeds City Region is the second home of financial, legal and professional services in the UK. Together, these industries have a GVA of £20 billion and employ 320,000 people. Over 30 national and international banks are based here, as well as three of the top five building societies, and Leeds is the only city outside London where all three of the UK’s major credit reference agencies have a main office.

And our financial services creds are only getting stronger. Earlier this year, the Bank of England announced plans for a new Northern hub in Leeds. It’ll be their only presence outside of London and will hold a fifth of their workforce when it opens in 2027. And that’s not all. The Financial Conduct Authority (FCA) will open a new data-focused centre here with 100+ staff by the end of 2022 and the newly established UK Infrastructure Bank is investing £22 billion here to support regional growth and help meet the UK’s net zero emissions target by 2050.

Technology is one of our core strengths

Leeds City Region has become a hub of innovation. In fact, our technology industry now has a turnover of £3.67 billion. It’s fuelled by 8,694 businesses that employ over 53,000 people. Not too shabby, right? And that’s not even the best bit, because the industry attracted $43.5 million of venture capital investment in 2020, proving that confidence in the region, and the businesses that reside here, is at an all-time high.

And while the tech sector is diverse, ranging from digital transformation to data analytics, it’s also uniquely placed to serve the financial services industry. We have a wealth of tech consultancies with experience of working in regulated markets, including operating around FCA regulations and compliance. Companies like AND Digital, which opened a new office in Halifax to support its work with insurance giant Covéa, and BJSS, which now employs over 1,300 people, are helping to shape the future of the financial services industry.

FinTech is a major growth sector for the region

Our expertise in both financial services and technology means Leeds City Region is ready to harness the power of FinTech. We’ve already attracted some of the biggest names in the industry – Contis, Tru Narrative, WorldPay and Nostrum Group all have bases here – and over 6,000 people are thought to be working in FinTech in the region. The latest company to join the throng is iwoca – since launching in 2012, they’ve become one of the fastest-growing business lenders in Europe. They employ over 300 people across the UK and have opened an operational hub in Leeds.

“Leeds has a strong heritage in financial services and banking, but we wanted to play a major role in the city’s FinTech evolution,” Seema Desai, Chief Operating Officer of iwoca, explained. “We looked at several cities and Leeds stood out as a natural second home from where we could support even more small businesses across the UK. We were particularly impressed with the size and quality of Leeds’ talent pool, its strong and improving infrastructure, as well as the city’s own distinctive culture and soul.”

The region is a hotspot for scale-ups

Leeds City Region has the second-highest concentration of scale-ups outside of the South East. In 2020, there were 124 scale-ups in Leeds alone, with 341 across the wider region. Clearly, this is a good place to grow a business, especially if you’re a FinTech, because there are already 24 FinTechs start-ups and scale-ups in the region. What’s more, Leeds City Region is home to three of the 19 regional participants in the FCA Sandbox to date. That’s the same as Greater Manchester and Scotland, in fact, only Bristol and Bath have had more.

The strength and breadth of these businesses is astounding. TruNarrative is just four years old, and yet, it’s become a household name in FinTech circles, and Ilkley-based SmartSearch, whose anti-money laundering software is used by 40% of the top 100 accountancy firms, is one of the fastest-growing tech companies in the North. These start-ups have found support in the local professional services sector – EY and PwC offer scale-up programmes, KPMG supports early-stage businesses and Addelshaw Goddard runs a national FinTech programme to provide legal and regulatory expertise.

The talent pool is growing every year

Leeds Beckett University

Leeds City Region has 9 universities and 14 further education colleges. 39,000 people graduate every year and 17,995 of them come from STEAM subjects, but what makes the region really exciting is how many stick around. We’re a net importer, which means we keep more graduates than we lose – in fact, 56% of graduates who study here stay in the region and 70% of those who leave to study elsewhere come back to work here. That’s in addition to the existing talent pool, which includes nearly 1.4 million people who are educated to NVQ level 2 and above.

Our universities are tuned into the local economy and invested in its success, which means, alongside offering FinTech courses, they help to drive innovation and identify new opportunities through their research. The University of Leeds, for example, launched the Centre for Financial Technology & Innovation in 2019. It brings together academics in business, law, data and analytics to tackle sector-wide challenges and support the development of new financial technologies.

The digital community is incredibly strong

Leeds Digital Festival

Credit: Leeds Digital Festival

There’s a real sense of community in Leeds City Region. Businesses come together in our many co-working spaces, where collaboration and support come hand-in-hand, but we also have a packed calendar of events, including meet-ups, socials and conferences. Leeds Digital Festival is the UK’s largest tech event. The 2021 festival boasted over 300 events and played host to government bodies including the DCMS, the G7 and the Centre for Data Ethics and Innovation.

FinTech North was launched at Leeds Digital Festival in 2016. Since then, it’s hosted over 50 events across the North and become the main public forum for FinTech businesses. Over the years, FinTech North has run a series of ‘reverse pitch’ events to encourage collaboration between start-ups, scale-ups and large corporations. It’s also part of the FinTech National Network, which creates national opportunities and promotes the industry’s interests globally.

The support is there to help businesses succeed

Leeds City Region is blessed with a multitude of accelerators, incubators and co-working spaces designed to help businesses succeed. Nexus is the city’s newest innovation hub. It gives businesses unrivalled access to the expertise, talent and facilities at the University of Leeds. Since opening in Spring 2019, Nexus has worked with over 400 businesses and hosted over 4,000 people at events. Similar university-led hubs can be found in York, Huddersfield and Bradford.

Leeds was the first English city outside London to be included in the Massachusetts Institute of Technology Regional Entrepreneur Acceleration Programme (MIT REAP). Designed to accelerate economic growth, it helps regional leaders to build and implement a custom strategy to support innovation-driven entrepreneurship. The programme has now finished, but the region will continue to benefit for years to come, especially FinTechs, because the sector was identified as a key area of focus in the programme.

The region’s FinTechs continue to attract investment

Panintelligence

Investment is so important to scaling up and Leeds City Region has plenty of success stories. SmartSearch recently received an equity investment from Californian firm Marlin Equity Partners, while Panintelligence raised £4.5 million in Series A Funding from YFM Equity Partners and Comhar Capital. Meanwhile, incuto bagged £1.75 million from the Northern Powerhouse Investment Fund, an initiative that provides £500 million of investment to boost small and medium business growth in the North of England.

The Northern Powerhouse Investment Fund is the most active player in Leeds, but BGF, Finance Yorkshire, IP Group and Future Fund all have fingers in the pie. This investment in Leeds FinTechs, and the confidence it shows, is helping them to scale up, fast. In fact, of the 14 high-growth FinTechs in Yorkshire and the Humber, 12 are based in Leeds City Region. Take cashless payment provider Tappit for example. Launched in 2017, they’ve raised more than £8 million in investment over the last four years.