The UK could become a cashless society within 20 years, according to research published by London & Partners, the Mayor of London’s promotional company, to coincide with London Technology Week 2016.
A survey of more than 2,000 consumers shows that 68% believe that cashless technologies will completely replace physical money by 2036. The figure is higher in London where three quarters of people said they thought cash would disappear within 20 years.
The data is supported by figures showing the rise in contactless payment technologies. New data from MasterCard shows that contactless spending has increased by 326% year-on-year in the UK.
Last week the Bank of England announced that it will be launching a fintech accelerator programme that will work with technology companies to harness fintech innovations. Mark Carney, The Governor of the Bank of England also remarked that “Financial technology companies will change the nature of money, shake the foundations of central banking and “deliver nothing less than a democratic revolution for all who use financial services”.
London’s status as a leading financial centre and technology hub has helped the UK to become a global leader for financial technologies. Recent research from EY shows that the UK’s fintech sector generated £6.6bn in revenue last year and attracted approximately £524m in investment. The fintech sector is also a major employer supporting 61,000 jobs more than in New York, or in Singapore, Hong Kong and Australia combined.
Speaking at an event during London Technology Week on the growth of the capital’s fintech sector, Gordon Innes, CEO of London & Partners, said: “London is the global leader for fintech. With the world’s leading financial services centre and Europe’s fastest growing technology hub, London’s fintech companies are disrupting the current financial industry and changing the way we interact with money. As a result, they are attracting record levels of investment and world class talent. From peer-to-peer lending companies, such as Funding Circle and Zopa, to remittance companies, such as WorldRemit and TransferWise, London’s fintech companies are pioneering the latest disruptive fintech innovations.”
Elliott Goldenberg, head of digital payments for MasterCard UK & Ireland, said: “We’re in what we might call a perfect storm for payments right now. There is this virtuous circle of creation and adoption in fintech where tech-savvy consumers and entrepreneurs are feeding from each other. No other market combines the expertise, the captive audience and regulatory infrastructure in this way.”
London is widely recognised as a leading global city for the development and adoption of fintech technologies. Figures from EY’s Fintech Adoption Index show that 25 per cent of digitally active Londoners identify themselves as fintech users compared with 14 per cent across the UK.
The rapid adoption of new payment technologies has been cited by experts as a critical factor in in the flood of investment coming into the UK’s fintech industry.
At Tuesday’s event, MasterCard will unveiled the latest intake of fintech start-ups into its global Start Path programme. The UK fintech industry is now so dominant that 25% of all Start Path businesses are British.
These include Everledger, a Whitechapel-based firm that uses blockchain technology to authenticate and certify diamonds and other luxury goods. Another east London business teaming up with MasterCard is Revolut, an app that allows users to seamlessly exchange, send and spend money around the world or online.
Eileen Burbidge, investor and HM Treasury Fintech Envoy, said: “The UK is emerging as the fintech centre of the world and London is the jewel in the crown of the UK’s fintech success story. With record levels of investment, access to talent, a growing culture of entrepreneurship and progressive policy makers and regulators, we have all of the right ingredients for success. I am confident that London leads the likes of Silicon Valley and Wall Street. Unlike the US, the growth of London and the UK’s fintech sector is being boosted by collaboration between key decision makers from the financial services and technology communities, as well as the policy makers in government.”
The consumer research by London & Partners has been released to coincide with an event at London Technology Week, hosted by London & Partners and MasterCard. The event will convene leading figures from financial services and tech, high growth startups, investors, accelerators and other influencers to explore how fintech innovations are transforming our lives and the world economy.