Greater Birmingham’s fintech boom triggered by professional services growth

  • A surge of digital firms are relocating to city region to meet the growing demand by BPFS firms for fintech and cybersecurity expertise
  • New GDPR regulations are further increasing demand for the region’s cybersecurity specialism

Greater Birmingham’s fintech cluster is seeing significant growth, with a 20% increase in the number of companies – driven by cyber security firms in particular – since 2010. The total number of fintech companies now stands at over 2,145, making it the largest cluster of any UK city outside the capital.

The growing numbers of fintech businesses relocating to Birmingham, are capitalising on demand from the city’s burgeoning business, professional and financial services (BPFS) sector.

The city is emerging as a global BPFS hub, with firms such as HSBC, KPMG, PwC and Deutsche Bank expanding their presence locally. Birmingham is home to 13,135 BPFS firms, more than any other UK city outside London, with the sector generating £13.2 billion per year. This is creating an unprecedented ripple effect in the digital industry, as these global businesses wrestle with new technology challenges and cybersecurity threats.

PwC’s latest survey economic crime and fraud*, revealed cybercrime to be the most prevalent type of fraud experienced by organisations, affecting half of respondents. 42% of businesses expect this to continue to be the most serious, in terms of business impact, in the coming two years.

Nicola Hewitt, Commercial Director at the West Midlands Growth Company, said: “Greater Birmingham is very well-placed to respond to the technological challenges that are emerging every day, with incredibly talented employees specialising in cybersecurity being hired by local firms. Greater Birmingham has the largest number of tech start-up incubators and accelerator hubs outside London. This, combined with the largest regional BPFS and technology sectors, has created the ideal environment for new and established fintech businesses”.

Specialist insurer Beazley is expanding its presence in Birmingham as part of its drive to grow its UK regional insurance market activities. The company’s Birmingham-based underwriters will be among the first employees to occupy new, state of the art offices that will also house Beazley’s out-of-London operational support centre for its UK and European business.

Ian Fantozzi, Chief Operating Officer at Beazley, said: “Birmingham’s position as financial services hub and its rich talent pool made it the obvious choice for Beazley to build an operational base outside London.”

Smaller firms in Greater Birmingham are also looking to meet the demand from global businesses for expertise in financial services technology. This has resulted in a burst of new technology businesses such as Falanx, a tech SME specialising in cyber defence and intelligence services. The firm relocated to Birmingham from Reading as it was attracted by the recent regeneration and investment pouring into the region.

Jay Abbott, Executive Director of Falanx, said: “With oversaturated tech hubs in the south of the UK, Birmingham has opened a lot of doors that would not have ordinarily opened for us. The access to talent that the city offers has allowed us to cultivate our cyber security services and focus on innovating technology in a fast-moving, cutting edge space.”

The region’s world-class universities provide the perfect platform for budding tech entrepreneurs to grow, with Birmingham City University specialising in areas such as data mining, cloud networks and the Internet of Things. Greater Birmingham’s expertise in this field is ensuring that the talent developed at these universities is being retained by Birmingham’s businesses.

Tim Kay, Director and Digital Lead at KPMG moved from the firm’s London office and has seen first-hand how Birmingham’s booming tech sector has transformed the region: “With tech, you can’t be subscale. You need to be big enough to compete with cities like Barcelona and Berlin, and Greater Birmingham is well placed to do that. One of the reasons KPMG has done so well in the region is due to business demand. An unparalleled number of BPFS firms are increasingly turning to us to advise them on everything from data analytics to GDPR regulations.

The UK’s tech talent is increasingly looking to locate to the region – attracted not only by the city’s career opportunities, but by the high quality of life that Greater Birmingham offers. The average salary in the West Midlands grew at the fastest rate of any region last year, including London**, with this competitive salary offerings inciting businesses and individuals alike to flock to the region.

Author: Yash Hirani

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