Tech Nation CEO Gerard Grech spoke to Business News Wales on a visit to Cardiff about why Wales’ technology space is in such rude health
Welsh startups and scaleups in Wales secured £129 million in 2020, a record for the country, with fintech – any technology that delivers financial services through software, such as online banking, mobile payment apps or even cryptocurrency – being a key area of acceleration.
The UK Government’s 2021 Kalifa review identified South Wales as a key fintech cluster ripe for further expansion as it set out a five-point plan to ensure the UK can retain its position as a global leader in the sector.
With the support of FinTech Wales, a not-for-profit organisation that aims to make Welsh fintech a pillar of the global economy by nurturing talent while connecting and enabling the sector’s ecosystem, and businesses such as tech growth platform Tech Natio, south Wales-based firms such as Wealthify and Amplifi have rapidly become global leaders in the field.
“The whole point of the Kalifa review was making the point that there are strengths in Wales, such as traditional financial services,” says Gerard. “But when you combine that with emerging strengths in AI and cyber, you get a sector developing and it was identified as a key area of strength for Wales, as well as other clusters in the Leeds Manchester corridor, Edinburgh, Birmingham. Focusing on the data and evidence shows that there is more and more investment going into this space.”
He credits the local support for the fintech ecosystem in Wales for creating a thriving sector. “FinTech Wales, which is the ecosystem builder, does an amazing job of making sure that there's a three- to five-year plan of how to make more of those strengths because there are traditional strengths in financial services. And then there are technology strengths, and the idea is to combine the two.”
Gerard says the right environment is being created by good policies.
“I think there are a very good set of policies now available, which is why we've seen such an acceleration over the 10 years of companies not only starting out, but actually now scaling up. The tax relief on r&d, aggressive tax credits and the relief on seed investment and enterprise investment at the very early stage. And then now you've got an EIS [enterprise investment scheme] as well. These are all policies that are about helping companies grow in scale with the right capital.”
Providing the right environment for startups to scale will be critical for the sector to continue to thrive, but Gerard thinks the pieces are in place in Wales.
“I think the Welsh Business Bank has been doing a great job of seeding more and more funding, and has really gotten behind a lot of the startups. But, as companies scale, they're going to need a different type of funding. Being able make sure that there are institutions and organisations and entities available to understand those types of challenges is something that we see in various parts of the UK.”
With the right ecosystem in place and a pipeline of talent into the industry, Gerard is certain that Welsh fintech is on an upward trajectory.
“I can only see acceleration,” he says.
