The UK must do more to encourage investment in the start-up community if London is to maintain its dominance as a global hub for financial services, according to panelists at an event organised by fintech accelerator Startupbootcamp.
Speaking at the event on Thursday, Kit Malthouse, Deputy Mayor of London for Business and Enterprise, said the City was looking closely at how start-ups could help modernise the financial services sector - which currently makes up around 10% of UK GDP.
"We do have concern that London's world-beating financial services organisations won't have the ability to move with the times," he said. "Many are still struggling with large legacy systems. We need to give our financial services the technology that should allow them to continue to dominate the world."
Fellow panelist, American-born Clare Flynn Levy, founder and CEO of Essentia Analytics Ltd, warned that the growth of London's fintech sector was being held back by a lack of funding and the absence of early-stage investors.
"London doesn't even have that many VCs, but the few there are have a different risk appetite to those in the US," she said. "UK fintech companies that have made it past the seed stage but aren't yet scaling face a vacuum when it comes to capital. This is unfortunate, and it's preventing London from creating some of the world's top fintech companies."
Malthouse agreed: "Until we remove some of the current complications around investment we will continue to choke off funding under £2 million. Somehow we need to get back to this Victorian ideal where everybody - not just rich individuals - feel like they want to invest in startups - and that will mean greatly simplifying the process."
Startupbootcamp's efforts to energise the community were given a boost by the news that SBT Venture Capital, a $100m fin-tech fund backed by Russian banking giant Sberbank, has joined as a corporate partner. The VC joins Lloyds, Rabobank and MasterCard in backing the accelerator.
Matteo Rizzi, general partner at SBT Venture Capital, says: "By announcing a partnership with the Startupbootcamp fintech programme today, we're hoping to establish SBT Venture Capital as a key player in the UK financial industry - particularly for growth stage companies and entrepreneurs."
Both Startupbootcamp's Nektarios Liolios and SBT's Matteo Rizzi are among a host of top speakers joining Finextra and Level39 at the two-day Finextra Future Money event in April to further explore the new wave of innovation sweeping across the European financial services sector.