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December 2016

How a history of innovation helped Manchester to create the ideal FinTech ecosystem for growth

Categories: FinTech

The City of London is among the most famous financial centres in the world – a place connected by tradition and trade to Wall Street in the United States.

But just as banks in Wall Street are part of much bigger networks spanning the United States, the English city of Manchester is gaining increasing importance in supporting the major companies in London.

The challenges and opportunities of the FinTech age have led companies large and small to reappraise the role that London’s satellite cities must play if the UK is to maintain its competitive advantage in the shifting global economy.

Manchester, with a rich history in the provision of financial services, and a leading role in defining the way that consumers and corporates will manage their money in future, has emerged as a major and significant ally to the Square Mile.

Manchester has enjoyed significant growth in its financial services sector – 70,000 new jobs in the last decade through investment from the likes of Worldpay, RBS and BNY Mellon - and FinTech is now providing further opportunities.

That success is down to both history and a carefully conceived ecosystem. The convergence in Manchester of the traditional technology, eCommerce, media and finance industries provided fertile soil for FinTech.

More traditional financial technology already existed in scale around Manchester and the wider North West, which is home to the technology functions of many banks and insurers such as Barclays and Co-Op Bank. Challenger banks including OakNorth and Aldermore have established operations here as have a number of FinTechs themselves such as Adyen, Ebury, AccessPay, Fibonatix and Nivo. 

The traditional media and creative sector in Manchester, now home to MediaCityUK – Europe’s largest purpose-built tech and media hub –  also brought complementary skills.

Today Manchester is the e-commerce centre of Europe, providing the insight and skills that are a key component of the customer experience and payment requirements of financial services.

Coupled with a steady stream of graduates seeking employment as software engineers, Manchester has a compelling narrative for those seeking a base for a new FinTech enterprise.

Part of this ecosystem is the array of FinTech/digital hubs across Greater Manchester, from commercial accelerators to co-working spaces, providing a base where start-ups, SMEs and larger firms can collaborate and flourish.

The Vault is a new FinTech digital workspace within the XYZ building in Manchester’s financial services district – Spinningfields.  Its aim is to bring all the players from the FinTech ecosystem together, banks and new market entrants, investors and academia as well as the regulator, to create a collaborative environment where true innovation happens. Rise Manchester is an entrepreneurial hub run by Barclays aimed at inspiring and nurturing tech entrepreneurs and start-ups; NatWest have opened a FinTech accelerator in the region and RBS have a growing payments technology team in the city.  

There is proof of concept for the co-operative approach too. BNY Mellon opened an office in Manchester in 2005 and now acknowledges the benefit of working with smaller developers who are more fleet of foot.

Alistair Davies, Director, Location Strategy, with Deloitte, says: “It is with good reason that financial services institutions are increasingly interesting in having additional bases beyond London.

“London is a very important centre, with one of deepest and most varied talent pools around the world,” Davies says. “Whereas in regional locations, labour costs may be 25% cheaper, real estate may be half the price, but there’s clearly some tension along the way about companies achieving a happy medium and quite often having a multi-site footprint provides a useful and effective balance in terms of locations.”

If you’re attending FinTech Week Silicon Valley, click here to book a meeting with Andrew Toolan, Head of Financial, Professional and Business Services, MIDAS and find out how Manchester, Europe’s top city for business competitiveness, can help you. If you’re not going to FinTech Week Silicon Valley, you can always get in touch with Andrew here.

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