With more than 2,500 fintech companies in the UK and a thriving ecosystem of talent, London continues to lead as a global hub for innovation. Yet, the sector faces questions about how businesses adapt to economic shifts, secure funding, and scale sustainably in a competitive market.
Following Fintech Awards London, Matt Hyde, managing director of the awards, spoke with Gautam Pillai, head of fintech research at Peel Hunt, about these pressing issues. Their conversation explored the current state of fintech investment, emerging trends across subsectors like wealthtech and regtech, and why Peel Hunt sees the sector as a key area for growth.
Building expertise in UK fintech
Pillai joined Peel Hunt in 2022, bringing over a decade of experience from Goldman Sachs and a passion for UK fintech. He described his mission to build a dedicated fintech practice at the midmarket investment bank, leveraging his expertise in IPOs to support private fintech companies.
Pillai shared his journey to Peel Hunt and his enthusiasm for the UK fintech ecosystem. “The UK fintech ecosystem is incredible,” he said. “We have more than 2,500 fintechs in the UK, but only a small percentage are listed. That leaves 99 per cent in private ownership, which presents immense opportunity to be part of their equity story.”
Since joining Peel Hunt in 2022, Pillai has focused on establishing the firm’s fintech research practice, which launched in January 2023 under the banner ‘Fintech is the New Internet’. He explained: “I truly believe that fintech as a sector is one of the most disruptive kind of things to happen after the advent of the internet, which is in the early 2000s.”
Challenges in a changing market
When asked about the current state of fintech investment in London, Pillai noted the UK’s position as the world’s second-largest fintech hub, driven by its financial heritage and talent pool. However, he acknowledged the challenges posed by rising interest rates and a shift away from the easy funding of previous years.
“These companies need to re-adapt their business models to kind of operate in a new interest rate environment,” he said. “What it does is it kind of weeds out weak business models and kind of only the strongest ones survive.”
Reflecting on valuations, Pillai highlighted how quality companies still attract strong investment. “Valuation is a function of the quality of the company,” he explained. “If you have a strong business model, if you have a profitable business model, if there is a strategy with more kind of addressable market to capture, I can see valuations coming back.”
Emerging innovation
Pillai identified payments, wealthtech and regtech as subsectors with significant growth potential. “Payments is an established sector,” he noted. “Having said that, we continue to see innovation in payments, and now we kind of see branching out of payments into, let’s say, cross-border payments.”
He also pointed to wealthtech as an area ripe for innovation. “Personal wealth, consumer wealth is something where still a lot of… there’s room for more innovation to happen,” he said. In regtech, he mentioned companies like GB Group and Onfido as examples of businesses driving advancements.
Judging at Fintech Awards London
As a judge for Fintech Awards London, Pillai described the experience as both challenging and rewarding. “It is intense, and it is tough,” he admitted. “Many of the times, someone winning a category would be by a very, very small margin. But it is fun at the end of the day – we get to see more people, we get to hear strategies, we get to hear visions.”
Pillai touched on the value of the awards as a platform for innovation and collaboration. “There are disruptive companies, great leaders, and I think it all points to the convening power of Fintech Awards London,” he also added.
Watch to discover more insight as Matt Hyde chats to Ed Pugh at Aon
The post Watch: In Conversation with Gautam Pillai at Peel Hunt appeared first on The Fintech Times.
