A global guide to the SMB market for fintechs and financial service providers UK
Read on to learn about:
• The size and composition of the small business market in the UK
• The fintech ecosystem and regulatory environment
• The top financial platforms in the region
The market at a glance
Size & make up of the market
The number of SMBs operating in the UK is larger than in other developed countries, but the market is heavily skewed toward sole traders. UK SMBs constitute a smaller share of employment than other OECD nations at 54%.
International trade
36% of UK SMBs are active exporters, and 45% are importers, on par with the OECD average of 39%.
Most popular financial software
QuickBooks Online and Xero are the leading small business accounting packages in the UK. Sage is also a popular provider and is currently pursuing a strategy of encouraging migration away from its desktop package (Sage 50) to cloud (Sage Accounting).
The fintech ecosystem
The UK punches above its weight when it comes to fintech. It's 2nd out of 83 in Findexable's global fintech index, supported by the relative strength of its banking sector.
Top financial software platforms
3.2M UK SMBs have specialist bookkeeping or ERP software
of UK SMBs use spreadsheets in place of accounting software
fully outsource bookkeeping to accountants
SMB tech readiness and the fintech ecosystem
Tech readiness and regulatory environment
Availability of high speed internet in the UK is lagging for a developed market which could hamper the digital development of SMBs. Adoption of eCommerce is in line with the OECD average.
The Making Tax Digital policy, which mandates electronic filing of taxes, has led to a surge in the use of software for bookkeeping since it was introduced for VAT in 2019. This trend is set to increase further as the policy extends to those filing income tax returns in 2024.
Fintech ecosystem
London has one of the world's highest concentrations of financial firms which has led to a flourishing fintech sector.
In 2021, the UK attracted nearly half of all fintech investment in Europe. The largest subsectors by number of companies are wealthtech and payments.
