Much of the government’s support of UK fintech has focused on London’s position as a “leading fintech hub” and silicon roundabout, the cluster of technology firms around Old Street. Despite talk of a “Northern Powerhouse” and regional hubs, how supported do peer-to-peer lenders feel outside of the capital?
“Government support? They never get out this far,” said Stuart Law, chief executive of Stockport-headquartered property lender Assetz Capital. “We tend to get the odd visit from a local MP. However, we do get invites to London events from the likes of the Treasury and the Financial Conduct Authority, which is good.”
Jane Dumeresque, chief executive of Cornwall-headquartered business lender Folk2Folk, has a more positive view on government support in the regions.
“I go to regular Bank of England meetings and there are lots of regional meetings, so it’s not a disadvantage,” she said. “I think the government has recognised that people are moving out of London and I definitely think there will be more support for the digital technology sector in the regions. There are not just national leaders, there are world leaders in fintech here.”
Despite the distance from Whitehall, being a regional P2P lender can have its advantages.
“There’s less strong servicing from the financial community in some parts of the country, so there’s an opportunity for P2P lenders,” said Dumeresque.
Law agrees. “There are one or two areas of the country in particular that are underserved – we don’t want to shout about it though as that could invite more competition!” he said.
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There can also be benefits when recruiting staff. Despite some initial challenges due to a smaller pool of talent, Dumeresque affirms that there are long-term advantages to being based in other parts of the UK.
“Once you recruit them, you recruit them for life,” she said. “They have usually grown up in the area and want to move back to a more rural surrounding. The ‘tech’ part of ‘fintech’ means you don’t have to be living in the capital with its high real estate costs in order to be part of the sector.”
Law agrees. “The Northern Powerhouse has its name for a reason,” he said. “There are lots of exceptional financial services employees here. The high cost of rent in London means that peoples’ disposable income is far lower in the capital, so by paying staff more you’re benefiting their landlords’ pockets rather than them.”
Within the wider fintech sector, a number of companies have chosen to locate themselves far away from the tech hub of shortage. Crowdcube, Atom Bank, ThinCats and Funding Invoice a just a few of firms choosing to base themselves outside of London.