As Europe’s largest financial firms cut back staff and prepare for Brexit, an emerging competition is charging at full speed.
The financial technology sector, a broad category that includes companies ranging from mobile banks to loans between individuals. It has hired energetically in the first quarter in the United Kingdom, the European center of financial technology. This is according to Ollie Sexton, director of the consultancy of recruitment Robert Walters. This follows a 61 percent increase in new financial technology positions in 2018. Which makes it the fastest growing sector of the London economy before Brexit, which provides contracting information.
Emerging companies that emerged after the financial crisis
The figures contrast with heavyweights such as Société Générale SA and Nomura Holdings Inc. Which are cutting thousands of jobs to reduce costs. The growth shows how the noise about emerging companies that emerged after the financial crisis and promised to reinvent finance is becoming a reality.
“A lot of people are excited about the way that digitization will change the financial industry and many companies that work for that purpose are experiencing exponential growth. A high proportion of job seekers and those who are open to new positions want to work in new companies that experience astronomical growth instead of those that make large-scale layoffs or that are carrying out internal restructuring,” said Sexton, based in London
This year, firms have focused on the technology side of fintech, hiring programmers and engineers instead of increasing financial functions such as risk and compliance, Sexton said. That is the case of Starling Bank Ltd., a digital bank based in London with more than 400,000 customers. Its chief executive, Anne Boden, says the five year old company is in full growth phase and is hiring engineers in particular.
“Traditional banks can not be maintained,” said Boden. “They are copying our functions more and more, but they can not copy our cost base.”
There is still a lot of ground to be covered by financial technology firms. Last year there were 76,500 jobs in Fintech in the United Kingdom, and the City of London projects 105,500 for 2030. The figure contrasts with 1.1 million for the entire financial services industry.
Financial companies of all sizes are suffering the impact of Brexit
Undoubtedly, financial companies of all sizes in the United Kingdom are suffering the impact of Brexit. Financial technology firms have to pay to attract the most talented employees to a country whose future remains close to limbo, raising salaries by up to 8 percent for some specialties, Sexton said.
Also, the expansion at breakneck speed carries its own dangers, as revealed by Revolut in a series of errors that attracted the scrutiny of the financial regulator of the United Kingdom. The digital bank said in February it plans to hire more than 200 people over the course of six months as it expands across Europe.
For now, investors continue to inject capital into the sector. Investment in the UK’s fintech sector increased 18 percent last year to $ 3.3 billion, according to Innovate Finance, a London based business group.
Also published on Medium.