Business valuers concerned about fintech can get a great view of this critical sector from ‘UK FinTech: On the Cutting Edge,’ a just-released study HM Treasury commissioned back in 2014 as part of the Chancellor of the Exchequer’s goal of making the UK the ‘global capital of FinTech.’ Imran Gulamhuseinwala, EY’s fintech leader, led the study, whose prime purpose was to compare the local ecosystem with those in California, New York, Hong Kong, Singapore, Germany, and Australia.

The report begins by positioning the UK as the dominant player in this sector, looking at 2015 data:

We estimate that the UK FinTech sector represented c.£6.6b in revenue in 2015 and attracted c.£524m in investment. With c.61,000 people employed in the sector (c.5% of the total financial services (FS) workforce), more people work in UK FinTech than in New York FinTech, or in the combined FinTech workforce of Singapore, Hong Kong and Australia.

Over half (54%) of UK fintech firms are in the banking and payment subsector, followed by credit and lending (20%), and investment management and capital markets (12%). Insurance, pension, and retail fintech make up most of the balance.

That being said, capital and valuation questions pose some challenges. The EY study finds that the government policy and human capital positions are stronger than the other international fintech ecosystems. And there are many effective financing schemes for startup fintech. Still, investment support for middle-market and listed fintech companies in the UK falls far short of the kind of capital available in California or New York, and meanwhile China is entering the market with major investments. This tends to drive successful UK fintech firms toward the NYSE or Nasdaq, though the LSEG’s ‘profile has continued to rise within the financial services sector with notable listing over the past two years.’ Much of this success has resulted from the 2014 Project Innovate programme.