From Silicon Roundabout to Silicon Fen: Why UK fintech is heading to Cambridge
Matt Harvey, lead front end developer at Neo, writes for the Cambridge Independent.
In recent years, the UK fintech industry has become a lot less London-centric. For many start-ups, the cost of office space in London is hard to justify, especially with how well the world has adapted to remote working over the past year.
When you add the increasing competition for tech talent, living costs in London and the growth in the ‘reverse brain drain’ trend, where people move away from big cities, other regions are becoming more appealing as a base for starting new businesses.
Cambridge has done particularly well in this respect – a recent report from The Global Fintech Index has shown that it has become a new hotspot for UK fintech, moving up 55 places from 2020 to 38th on a global list of fintech hubs.
But why does Cambridge – or Silicon Fen to the locals – appeal to fintech companies like Neo, and what does this mean for the local area?
Decades of investment and partnerships bearing fruit
Firstly, being home to a booming industry and attracting more companies will boost the local economy. In the first quarter of 2021 alone, fintech firms worldwide raised $22.8billion. That means more jobs and local investment.
Earlier this year, the UK government’s Kalifa Review for the fintech industry proposed the creation of fintech “hubs” around the UK that will support and scale regional specialisms unique to the UK, such as intellectual property created in UK universities. This presents a huge opportunity for Cambridge.
This strategy is a continuation of an approach that has been in place for decades to improve collaboration between academia and businesses focused on science, technology and engineering. This attracted a range of pioneering global companies and research companies to establish a presence in the area.
By positioning itself as a hub for one of the most exciting industries in the world, Cambridge has the opportunity to play host to the next generation of innovative technology companies – bringing in potentially thousands of jobs and millions in investment.
Why Cambridge for Neo?
Neo is a fintech company established in 2017 to create an integrated enterprise-grade banking, payments and treasury management system that is affordable to SMEs. Our single platform brings treasury, payment, cash flow management and FX execution functionality together in one place, making life easier for finance professionals and SME owners by saving them time and money.
These businesses are the backbone of the UK economy and huge drivers of innovation. For example, the voice recognition technology underpinning Apple’s Siri and Amazon’s Alexa was developed by small businesses from Cambridge.
But SME owners face a host of challenges accessing effective cross-border banking services and are charged high fees for payments. Many of the existing processes are reliant on archaic technology that is decades old, slow and cumbersome. We saw the opportunity to change that.
We opened our Innovation Lab in Cambridge in 2018. Based in the Castle Park area, our team is responsible for the technology and engineering processes underpinning our system.
When we were scouting locations, we looked at different cities across the globe. We wanted to focus on talent cultivated in top universities but stay in a location that is close to our clients, partners and investors, many of whom are based in the UK and Europe.
So, Cambridge, with its world-leading university and talent, as well as its proximity to London, was a natural choice for us.
Looking ahead, the next few years are set to be very important for UK fintech hubs like Cambridge. No country in Europe rivals the scale of the fintech industry in the UK and Kalifa’s review has clearly shown the UK’s intention to maintain this edge and ensure the whole country gets a slice of the pie. This will further cement cities like Cambridge as one of the most dynamic and welcoming places to start and grow a financial technology business.
We are proud to be part of the local fintech scene and the team here will be integral to our success. We may be globally operational in more than 20 countries, but our technology is proudly made in Cambridge.
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