A Glimpse into Britain’s Booming Tech Sector

The UK stands as one of only three nations boasting a tech economy valued at over $1 trillion. It is home to more than 100 billion-dollar tech giants, rivaled only by the US and China. Although these figures aren’t the only markers of success, they undeniably shape perceptions and magnetize investments, and both of these factors are crucial for the UK tech sector’s ongoing dynamism.

In 2022, the nation’s overall investment sum was bolstered by several substantial transactions, such as the $1.8 billion deal with Interactive investor. Among the top ten fintech deals in the EMEA area, half took place in the UK.

Forecasts hint at the UK’s tech value soaring to $2.6 trillion by 2032, a speculation drawn from the past decade’s trends. This blooming digital tech economy contributes to the surge in tech job openings, a testament to technology’s omnipresence across a myriad of sectors.

A Leap into Digitalisation: The UK’s SMEs in Spotlight

The transition to contactless payments among the UK’s small and medium-sized enterprises (SMEs) has overshadowed their European peers. According to an article by Fintech Payrow, British SMEs lead the way, with the majority now embracing near-field communication (NFC) cards. The pandemic catalyzed this shift to digital banking channels as many physical outlets shuttered and face-to-face interactions dwindled. The rise in tech-savvy consumers parallels the increase in digital-only bank offerings.

Barclays Bank’s UK data reveals:

— Over 90% of potential NFC transactions were conducted using this method in 2022.

— Mobile contactless payments surged by 109%.

— Total transactions saw a nearly 50% uptick.

— Average transactions hovered just above £15.

In 2022, the typical NFC card user undertook 220 transactions, a rise from 180 the previous year.

The Digital Banking Surge in the UK and the Potential of Open APIs

According to an article by computerweekly.com, online banking has witnessed a notable surge in popularity among Britons. The statistics show that 24% of Britons now bank exclusively online, marking a significant rise from the 9% reported in the inaugural survey in 2019.

Further projections from the study are compelling. Within the upcoming 12 months, it is estimated that 5.3 million Britons will open an account with a digital-only bank. Additionally, another 4.8 million are contemplating making this shift over the next five years. Should this trend continue, by 2028, over 22 million Britons could be using a digital-only banking account.

These numbers present a challenge for high street banks. With an active push for their current clientele to transition to online platforms, these banks are faced with an unforeseen obstacle. The survey highlighted that 16% of UK adults, which translates into approximately 8.5 million individuals, have already switched or are considering switching to a digital-only bank account. This decision is influenced heavily by the decreasing number of physical bank branches in their local areas. This decrease is a direct result of major high street banks closing numerous branches, inadvertently pushing their customers towards digital banking solutions.

As a solution bridging the gap between traditional and digital banks, Open APIs have emerged as a pivotal technology with revolutionary potential, especially for fintech start-ups. Historically, the banking sector, known for its rigorous regulations and substantial capital requirements, appeared nearly inaccessible for budding start-ups. APIs, however, are altering this perception. These digital gateways empower start-ups and online banks, granting them access to essential banking functions without the monumental challenge of developing an entire infrastructure.

Consequently, this access accelerates the creation and roll-out of innovative financial services, reducing both the time-to-market and associated costs.

The integration of banking APIs has paved the way for cutting-edge applications, such as micro-investing platforms and peer-to-peer lending services. Open APIs empower these new-age, service-oriented start-ups, equipping them with the tools to provide clients with sophisticated features, including dashboards, account management tools, and other API-driven functionalities.

Diving Deep into Tech and Impact Sectors

Fintech stands as a colossal pillar in the UK’s tech realm, constituting 41% of company value in 2021. However, sectors like health tech, climate tech, energy tech, and deep tech should command more attention.

Deep tech, underlined by tangible engineering or scientific breakthroughs, promises solutions to global challenges like climate change and sustainable food production. According to Forbes, the UK, as the leading region in Europe for investment in this sector, invested $5.1B in 2022, more than double that of France and Germany combined.

The impact tech sector, focused on creating significant positive outcomes for humanity or the environment, has witnessed considerable growth over the past decade. Despite this, it requires more support.