London calling: how the UK capital became a fintech incubator

In a city synonymous with finance, this new disruptive style of banking has taken off

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Hear that booming noise? It’s the sound of London-based fintechs smashing records for global investment, making waves in a capital that’s hit the sweet spot in terms of finance and tech. As Anne Boden, founder and CEO of UK mobile-only bank Starling, based in Liverpool Street, points out, “If Silicon Valley is all about tech but not about finance, and New York is about finance but not tech, in London, you have them both coming together”.

While the UK has long boasted world-beating talent in cybersecurity and AI, the capital has regularly been at the forefront of innovative financial products, and since 2008, has led the way in birthing more ‘unicorns’ (tech businesses valued at $1bn-plus) than anywhere else in the world bar the US and China. It’s the fastest growing sector in London’s economy, too, having created 61% more vacancies in 2018 than 2017. More than 1,000 fintech headquarters are now based in the capital – heavyweights such as Worldpay, Finastra and TransferWise. While in 2019, London achieved more fintech venture capital deals (194) than even New York (164) or San Francisco (123).

There are a number of factors driving the boom. Firstly, Britain’s regulatory framework, with its pro-entrepreneurship government, allows entrepreneurs to build and then regulate in an iterative process once they’re up and running. Secondly, the sheer geographical proximity of trillions of pounds running through the financial system in the ‘traditional’ City means there’s more VC cash here than anywhere else but the US. Location-wise, London is also handy for travel – whether travelling to and from Europe, Asia and the US. And, adds Andy Silvester, deputy editor of City AM, “It’s London: a city that young, bright, talented people want to live in. As a desirable place to live, with the greatest of respect, it knocks cities like Frankfurt into a cocked hat.”

Says Monzo co-founder and CEO Tom Blomfield, “The technology scene in London didn’t really exist back in 2005. We tried to raise money and it was impossible, so we had to go to Silicon Valley… Global investors are pouring hundreds of millions of pounds into London companies now.” Last year, Monzo hauled in US$144m.

“The London tech scene has been gathering momentum so rapidly since we started in 2015,” says Tessa Clarke, CEO of Olio, based in Finsbury Park, North London. “It feels like every day there’s a new accelerator launching, there are new investment funds starting, tons of meet-ups and events. What I love about London is the diversity of the start-ups compared to Silicon Valley, solving problems that reflect that diversity.”

Graham Smith, managing director of Mayfair-based company Volopa, agrees: “There’s a lot of creativity, a lot of entrepreneurs, and a lot of good ideas coming out of the capital. There’s scope to do things differently in today’s banking and payments ecosystems. If you were starting today it’s likely you’d lead with something other than a plastic card carrying a chip for global payment solution. While the card has its place, the average mobile phone has far more technology, data security capability and features in it than a plastic card will ever have.”

Revolut CEO Nik Storonsky similarly thinks UK fintechs have the edge over their US counterparts. “We are three or four years more advanced… in terms of product, in terms of regulation, in terms of size,” he told Sifted. “US companies should learn from Europe.”

Here we take a closer look at the mobile money apps disrupting UK traditional banking. >>

Related: Why 120 millionaires are calling for international tax reform since the World Economic Forum


The most easily identified payment card in the UK – Monzo’s hot coral card – actually began as a bit of a fluke. “I was meeting our card manufacturer – this was really early days – and saw a card for Debenhams, it was a neon gift card,” says head of design Hugo Cornejo. “We mostly wanted it so when we went to a restaurant, people would ask about the card.” 

Founded as ‘Mondo’ in 2015 by five former-Starling execs, including Tom Blomfield, Monzo was among the first challenger banks to hit to UK market. It was disruptive from the start, setting an investment speed record in 2016 by raising £1m in just 96 seconds on the Crowdcube investment platform. Now it’s grown from a prepaid card offering to a regulated bank with 3m customers, 81% of whom are 39 or younger, and plans to expand into the US market – still focused on simplicity of use and day-to-day personal expense management. “The banks really focus very hard on their existing set of financial products,” says Blomfield. “But human beings mostly focus on day-to-day payment processing.”


The UK’s most valuable fintech startup, thanks to a recent funding round that tripled its value, Revolut was founded in London in 2015 by Nikolay Storonsky and Vlad Yatsenko. Revolut began as a currency conversion tool, but now offers everything from everyday spending and budgeting, to foreign currency exchange and easy-access stock trading – including cryptocurrency – to customers across 24 markets. 

Based in Canary Wharf, the company’s rapid growth saw Revolut bring on new staff from the traditional banking world in 2019 – including former Goldman Sachs and Deutsche Bank director Wolfgang Bardorf; financial crime specialist Philip Doyle, who has worked with Visa; and deputy CFO Stefan Wille, formerly of N26 and Credit Suisse. Storonsky says: “If you have brilliant people around you, it doesn’t matter what kind of business you run… you will always succeed, because you can always change direction.”


Starling’s online-only banking systems cater to individuals and businesses, and aim to streamline the traditional application process of big banks’ business accounts to avoid monthly fees and waiting times. 

Its spending insights and digital saving platforms lend themselves to budgeting towards specific goals. Founded in 2014 by former Allied Irish Banks chief operating officer Anne Boden, the brand won Best British Bank and Best Current Account 2020 for its personal account platform. With a new Euro-banking product and exclusive cash depositing partnership with the Post Office, this impressive bank is truly mobile. 

Boden’s motivation, she said last year, is to disrupt the “unfair” practices of big banks: “Starling has created a movement of people and a movement of companies that are changing the industry, and the rest of the incumbents are reacting by making banking fairer for everyone.”


Where most fintech target younger users, Mayfair-based company Volopa has identified a need for a product that caters to affluent professionals and high-fliers. Its core product, a prepaid multi-currency Mastercard, allows users to simultaneously hold 14 currencies which can be exchanged at the InterBank rate – the lowest possible foreign exchange rate – without hidden fees. Inspired by the need for businesses and HNW individuals to work seamlessly across borders, Volopa is designed to make corporate and family expenses as easy to manage as its personal-use FX accounts have proven. 

“Our top-tier business card is designed for corporate travellers from SMEs to big multinationals,” says managing director Graham Smith. “It’s all about the customer experience and the added value which makes the product more targeted, to make the experience easier and better for our customers; and at the same time, to maintain security – paramount when your job is in financial services.”

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