Confidence in prospects for the UK economy among the country’s leading fintech founders has fallen to an alarming new low.
An annual survey of 500 leaders in an explosively growing sector in which London leads the world reveals pessimism about the state of the UK economy has surged in a year.
The research, published less than a fortnight before what is expected to be a heavily tax-raising Budget from Rachel Reeves, found that 81% are not confident about the general economic outlook for the next 12 months, up from 46% a year ago.
However, when it comes to their own companies they are much more upbeat with 92% of founders expressing strong confidence in their own businesses, up from 86% last year.
Fintech has been a huge success story for London with some start ups, such as Canary Wharf based Revolut and Shoreditch headquartered Wise, going on to become some of Europe’s biggest players in the sector.
The findings come after a year of turmoil for the business sector in the UK with growth slowing to a crawl and tax revenue raising by Rachel Reeves in the last Budget loaded on the private sector.
The Chancellor also unveiled measures seen as unfriendly to entrepreneurs such as the abolition of the non dom tax arrangements for foreign born wealth creators who work in the UK.
Worryingly the number of founders considering relocating abroad has crept up to a new high of 46%, compared with 40% in 2023 and 43% last year.
However, founders welcome the Government's recognition of the huge importance of fintech to the UK economy and the pledge to make London the "most technologically-advanced global financial centre." However, they say that on the ground progress remains elusive.
Only 14% of founders rated the Government's approach to fintech as "good" - with none rating it "excellent" - while 47% view it as “poor” or “awful”.
The biggest constraints of growth were inefficient and slow regulation, access to funding and market conditions.
Founders express particular concern that regulation of AI is not keeping pace with innovation.
They survey found that they are enthusiastic adopters of AI with 83% using it in their operations and just 9% neither using it nor planning to within the next year.
Almost three quarters expect AI to reduce operating costs over the next three years but 42% worry the FCA is too risk-averse in its AI regulation.
Seb McDermott, co-chair of Fintech Founders, said: "This survey reveals the remarkable resilience of UK fintech founders. Even as confidence in the broader economy has fallen dramatically, founders' confidence in their own businesses has actually strengthened.
“This isn't misplaced optimism – it reflects their ability to innovate and adapt, even in challenging conditions. These are exactly the entrepreneurs the UK needs to drive growth, and they deserve an operating environment that matches their ambition."
Willem Wellinghoff, UK chair and chief compliance officer of the survey’s sponsors Ecommpay, said: "The speed of AI integration identified in this new report is remarkable. It’s clear that fintech founders aren't waiting for permission – they're already using AI to transform everything from customer service and fraud prevention to regulatory compliance.
“However, with confidence in the government’s approach to fintech only at just over 50%, there is clear urgency needed to provide a governmental and regulatory framework that can keep pace and also support growth and innovation.”
Fintech Founders is a grassroots, non-profit network of around 500 UK fintech founders, representing a range of businesses, from start-ups through to more than ten unicorns.
Members have founded companies operating in a broad range of areas, including banking, lending, payments, crypto, investment and many others.
