The UK is among the top 5 innovative countries, alongside Switzerland, the USA, and Sweden, with Israel, South Korea and Singapore following closely behind.
Each year the UK has invested nearly £16 billion (just under 1% of GDP) in research. This is to develop new products to compete in a fiercely growing technology sector. Most of this has been directed toward the traditional industries, such as energy, advanced manufacturing and biomedical applications. Underpinning all of that is developments in the digital economy, such as artificial intelligence, blockchain and Big Data.
The financial services industry is long overdue a digital upgrade. It is already to contributes £132 billion to the UK economy – almost 7% of total economic output. This FinTech market comprises the broad professional services within this sector. This includes legal provision, accountancy, as well as finance and banking.
However, compared to other industries, only a modest 3% of research focuses on FinTech. To combat this, the UK Government has set out an Innovation Funding Roadmap that seeks to grow FinTech and double its impact on the economy.
To achieve this, there will be a noticeable up-shift in momentum driven by policy, detailed in the FinTech Kalifa Review, including:
How can I secure funding?
The best way to access lucrative government funding and private investment is to have a value proposition for the product or service you wish to fund. Focus on articulating the industry challenge your innovation seeks to solve, and how you will capture the market as a result.
An example of the government’s focus is the new £7m funding competition aimed at the Fintech sector. The “Innovation in Professional & Financial Services” competition opened on the 9th of September, and to be in with a chance of securing up to £500k of funding, you need to submit a bid by 9th November 2022.
While a broad range of project themes are eligible, some topics will not be funded in this round. This includes the development of green finance, cryptocurrencies, or quantum technology.
UK financial services firms are eligible for R&D tax credits relating to qualifying R&D. However, unlike in the US, UK banks’ technology spending related to innovation does not always qualify for significant R&D tax credits, hampering their ability to partner effectively with the fintech ecosystem.
FI Group helps clients secure non-dilutive funding by presenting a robust business case of the technical and commercial elements of an R&D project to secure both government grants and tax credits. Contact us now to find out how we can help your business grow.