Tech boss says Leeds can become fintech hotspot

The city has become a growing player in an industry that has in the past been overly associated with Manchester or London.

While the first wave of fintech companies from the early 2000’s gave birth to a few world class players, the second wave is currently enabling Leeds to achieve its well-deserved status as the North’s fintech hub.

Leeds’S financial reputation is well established with the offices of over 30 national and international banks within its city borders. But more than this, it has long had a pedigree for innovation in financial services stretching back over a century.

It was in Leeds where the first Building Society outside of the Midlands set up shop, and back in 1989 Leeds became home to the country’s first ever telephone bank, First Direct.

From 2000 onwards, Leeds has provided the perfect conditions for the emergence of a fintech ecosystem – sector expertise, bright computer science graduates, lower cost of living operation versus London and good value office space.

The first fintech wave which happened after the dot-com bubble saw the creation of SSP and Callcredit, two fintech businesses that were recently sold to private equity investors for hundreds of millions of pounds.

Nostrum took advantage of the strong local presence of financial institutions and became an award-winning banking software provider.

Today 60 per cent of FX trades worldwide take place using a system built and delivered by BJSS, another local technology champion.

However, a lack of investment made it difficult for many of the smaller fintech businesses to scale and survive the 2008
financial crisis. Given the city’s strong infrastructure and the increased disintermediation of financial institutions, a new wave of fintech start-ups broke in Leeds.

The Floow is revolutionising the insurance industry by providing motor insurers with detailed analytics on their customers, while White Label Crowdfunding strongly contributed to the emergence of a whole new industry.

The Payments sector is also getting a lot of traction. Worldpay opened up an office in Leeds and Contis Group, a Skipton based debit card payment provider, is currently growing at rates nearing 50 per cent per year. This renewed activity pushed some international private equity firms to look closer at fintech in Yorkshire with the likes of LDC and GTCR recently investing in the region.

Nevertheless, there’s more to be done if Leeds is to fulfil its potential.

Yorkshire has yet to receive the same interest and support from venture capitalists and private equity funds currently given to London or Manchester.

Yet it is these companies, after all, that offer the greatest
potential for job growth and turnover if successful. Recent initiatives such as Dotforge, a local Fintech accelerator which opened up in 2014, definitely go in the right direction, but more
investment activity is needed if Leeds is to fulfil its fintech potential.