#ICYMI - new report for Supporting UK FinTech
Accessing a global talent pool #TalkFinTechTalent
#TalkFinTechTalent - new report from @WPI_Economics and @InnFin looks at how to secure growth in the UK's booming FinTech sector post-Brexit.
Big challenge is ensuring that FinTech has the global talent it needs to thrive.
#TalkFinTechTalent - FinTech is a sector in which the UK has a strong competitive advantage.
Globally, the UK ranks second in the world by FinTech VC deal volume, and third globally by total investment, with investment in FinTech reaching $1.8bn in 2017.
#TalkFinTechTalent - Fintech Firms are growing rapidly
Estimates suggest that over 75,000 people are employed in UK FinTech, with that number expected to grow rapidly in coming years.
Respondents to our survey suggested significant employee growth over the past three years: In 2017 the average employee count of respondent's firms was just over 40, a 100% increase from 2015.
This growth is supported by findings from WPI Economics' analysis of 84 sample company returns accessed through Companies House which shows a 57% increase in total employment over the past four years.
#TalkFinTechTalent - The UK FinTech sector is inherently international: It relies on international STEM skills and entrepreneurial talent.
Financial innovations have an impact across globally-connected services.
#TalkFinTechTalent Ensuring pipeline of talent for UK FinTech can be challenging. Research suggests that:
1) The UK is suffering from a "homegrown" digital skills shortage, with estimates that over 30% of the UK's FinTech human capital is from the EU and from overseas; and that
2) Even with existing immigration rules, many tech / digital sectors are struggling to fill the vacancies that they have.
#TalkFinTechTalent - UK FinTech relies on highly skilled migrant workers
WPI Economics estimates suggest that over four in ten of those working in the UK FinTech industry are migrant workers.
This compares to just 11% in the wider UK labour market.
Three (high-skilled) technical job roles are typically performed by EEA and non-EEA migrants
1) Computer and software development;
2) User experience and design; and
3) Process and design optimisation.
#TalkFinTechTalent - Over 50% of respondents explained that their FinTech companies existed due to the involvement of EEA migrants in the founding process
#TalkFinTechTalent - Need to ensure that changes to UK immigration policy post Brexit support industry to attract highly skilled workers.
When asked about the current system, 82% of survey respondents noted the difficulty of attempting to recruit and employ non-EEA migrants compared to the ease of EEA migrants under current systems. One firm described how:
"Visa rules are too complicated and onerous to be worth the investment for a firm our size, we simply won't consider candidates without current right to work."
Around half of respondents (46%) said that they had already, or were intending to, change their behaviour in relation to workforce management in response to Brexit, implying that at the sector's current size over 700 firms would shift their behaviour in some manner.
#TalkFinTechTalent - to understand the potential impact of tightening immigration rules on FinTech we used existing evidence, our survey of FinTech firms, Companies House data and in-depth interviews, to create scenarios for how the sector could evolve over the next 15 years.
#TalkFinTechTalent - With no changes to the UK's immigration system, our projections suggest that the UK FinTech workforce grows from around 76,500 in 2017 to around 105,500 in 2030.
Within this total:
1) UK workers grow from approximately 44,000 to 60,500;
2) EEA workers grow from 21,500 to 29,500; and
3) non-EEA workers grow from 11,000 to 15,200.
We then created a set of scenarios which suggested how the sector would evolve over the coming decades.
The model's central scenario suggests that 13% of visa applications from EEA migrants wanting to work in FinTech get refused under a post-Brexit immigration system - this is the average rate of refusal between 2010-2017.
#TalkFinTechTalent - Our central scenario suggests that migration restrictions could lead to a shortfall of 3,200 EEA workers for UK FinTech between 2021 and 2030.
Based on GVA per head in the wider financial services sector, this would amount to a direct loss of £361m to the FinTech sector.
#TalkFinTechTalent There is now a vital opportunity to ensure that the UK's future immigration system provides the talent that UK FinTech needs to continue to be a global force.
To read the full report click here.