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How Newcastle became the North East’s fast-growing fintech hub

15th October 2021

When you think of UK fintech, your mind likely goes straight to London. But Newcastle, named as an emerging fintech hub in the 2021 Kalifa Review of UK Fintech, has put itself on the global fintech map, in particular for its strong specialism in operations.

By Aaron Holmes, CEO and Founder of Kani Payments

”I saw first-hand the increasing data complexities and compliance requirements within the industry, and also how payments technology or paytech could support this and enable new and existing fintech businesses to get their products and services to market faster.”

 

I spoke to Dawn Dunn, Fintech Cluster Manager at the not-for-profit regional group, Dynamo North East, to find out why this is the case.

According to Dawn – who is one of over 150 Dynamo members working to promote the growth of the North East tech economy – there are several pull factors making the region an appealing location for financial services in general, and fintech in particular.

She explained: “We’ve got some key players here with long-standing strength in payments, including established names, such as Newcastle Building Society (NBS), Virgin Money (Northern Rock), and Sage. It’s an extensive family tree in the region , whose roots started many years ago.

“This historic financial services market helped to create what is now a thriving fintech ecosystem – drawing from a wide range of technology and data skills, professional services, and a strong support network.”

Not only driven by the lower cost of doing business; the convenient location between the existing financial hubs of London and Edinburgh; a diverse pool of talent; and an existing reputation for tech and data research, means the region is massively growing its roster of fintechs.

As Dawn said: “Companies are moving into the region for its affordability and being able to tap into the resources that are within the region itself, or at either end of the Edinburgh – Manchester corridor.

“The geographyhas a good track record for job ‘stickiness’, and part of that is because there is high quality, affordable housing stock, easy access to the beautiful coastline, and a fantastic rapid transport system. All of those things are important, and they paint a picture of why we have a very unique fintech offering here.”

 

The growth of the North East fintech hub is not majorly due to competition, but more by a spirit of collaboration for the benefit of all.

“We want to learn from other regions and other organisations, so working together, collaboratively is really important,” Dunn commented. “We’ve got a real opportunity to pull together. The future is decentralised, and there is sufficient opportunity for everybody. What’s more, the fintech scene is only going to accelerate – and we’re in a really strong position to be a key part of that”

Making dynamic inroads into big data

 

Define ‘Canny’ /’kani’/ Adjective

1. Someone who is careful or clever with money, a bit like our customers.

2. Northern Eastern English or Scottish Slang for a good, genuine person. Also like our customers! Example: “She’s a canny lass”


Named with a nod and a wink towards the “canny” Newcastle term, Kani is a payments data ingestion and analytics tool, bringing automation to the manual finance processes, faced by fintechs globally. Based out of our North East HQ, we work with fintechs, challenger banks and payment companies all over the world to disrupt decades old data reconciliation processes.

I saw first-hand the increasing data complexities and compliance requirements within the industry, and also how payments technology or paytech could support this and enable new and existing fintech businesses to get their products and services to market faster. They must process their data correctly, ensure money is where it should be, and be able to evidence it on demand, but this can cause a huge headache and is very time consuming – especially when your expertise is not in the realm of payments data.

While data reconciliation had always been a bit of a problem and a very manual task without an adequate solution, in recent years the task has become astronomical and simply outpaced the technology designed to handle it.

Using our software services, BIN sponsors, challenger banks and other fintechs can complete weeks of transaction reporting and reconciliation work in under 30 seconds.

 

Growing our fintech roots in the North East

 

Kani knew and recognised Newcastle and the wider North East area’s fintech potential, but we’re not the only ones. The region has long been hotly tipped as a place to be for operational fintechs, thanks to Newcastle’s reputation as a UK Science City – which boasts four national centres of excellence specialising in big data, energy, ageing and marine, and two world-leading universities.

It is also the best represented region outside of London for Tech Nation’s Fintech Growth Programme initiative, with names such as insurtech start-up, honcho, and automated invoicing platform, Paid, joining Kani on the list.

Clearly, the North East has an incredibly bright future ahead, and it’s a real privilege to have established a base here right at the cusp of the region’s upward trajectory.

Essentially, alongside the fact that I’m Newcastle born and bred, that was the logic behind establishing Kani here. I don’t just want Kani to benefit from the incredibly supportive feel of living in such a vibrant fintech hub, but I want to give back to the area that has given so much to me by creating jobs and opportunities that stimulate further growth.

 

What’s next? The importance of fintech skills training


The North East’s many economic and social advantages are giving fresh incentive for organisations in the area to ramp up skills training relevant to fintech companies.

As Dawn said: “It’s extremely important to equip people with the right building blocks to go into fintech companies where they can hit the ground running. Local universities such as Northumbria University and Teesside University have started fintech courses, which will be a strong pull for people to the region, and we will shortly be able to announce a fintech bolt-on to an intensive data training course.”

There’s such a rich wealth of talent in this area that’s been up-and-coming for a long time. Now, it’s time for the people of the North East to really have their moment.