There has been a lot of financial talk regarding what the Brexit means, and how it will affect Britain’s economy. Some experts warn that this “depression” spells disaster for the UK’s fintech sector, as investment numbers have been dwindling in Q3 of 2016. British start-ups have a harder time securing funding, and it looks like this trend will spill over into Q4 2016.

UK Fintech Sector Takes A Blow

Do not be mistaken in thinking that entrepreneurs in the UK are less eager to launch new startups that will disrupt finance as we know and use it today. London is still the financial capital of the world, and a lot of money is flowing from investors to fintech startups. However, the number of funds changing hands

This news is in stark contrast to the overall increase in fintech funding by 27%. A total of US$15.2bn has been invested in startups during 2016, yet less money has gone to UK companies than ever before. Interestingly enough, the total funding for this year has already surpassed all of 2015, and there are still three months worth of deals waiting to be recorded.

UK VC Investment has gone down by 26% overall, which is a rather surprising turn of events. Despite this lack luster quarter, a total of US$532m has been invested in the region’s incumbents. When comparing that number to 2015’s, though, it is obvious that the UK

Innovative Finance CEO Lawrence Wintermeyer told the media:

“While the UK still attracted a high number of deals for fintech, there’s been a significant drop in investment, year on year, to Q3 2016. A head of the Autumn Statement Innovate Finance urges the Chancellor to ensure that the UK continues to drive investment and innovation, attract talent, and maintain an open trading relationship with the EU and globally.“

Specific fintech industries continue to attract a lot of interest from investors, though. Challenger banks, money transfers, and SME financing are the three clear market leaders in the UK right now. However, there is also a large focus on distributed ledgers, and even digital currency offerings.

Other regions around the world are seeing increased numbers regarding VC investment. China is the new global market leader, as the country outpaced the US in deal value during Q3 of 2016. That said, the US represented a higher deal volume, as ten of the top twenty fintech deals involved US-based fintech startups.

If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.