The Payments Group has published its “Beyond peak finance” report, suggesting that the post-COVID UK finance sector is in freefall.
There are now 10,000 fewer finance businesses in the UK compared to 2020, when the number of finance business in the UK peaked, and many sectors including banking and financial management are in rapid decline.
The report is based on comprehensive data from the UK Office of National Statistics’ Labour Market Statistics and business counts from 2010 to 2024.
It shows that the industry has consolidated, businesses have left, failed and technology has made some legacy finance industries obsolete.
TPG urges the UK to fight back against the rise of US tech giants like Apple and Google, which are starting to dominate the UK payments sector.
It also calls for competent government / regulatory oversight to ensure that one of the UK’s strongest sectors does not continue to decline.
The latest finding, regarding the regulatory oversight is particularly poignant as just today the UK Government announced it is considering scrapping the Payments Systems Regulator and folding it into the Financial Conduct Authority.
Key findings include:
- The number of UK finance businesses peaked in 2020 (88,875) and has shrunk quickly since. It saw a net loss of 9,835 between 2020-2024 (an 11% decrease)
- The data shows that the finance sector can be viewed in three distinct periods since the 2008 crash ‘Slow growth’ (2010-2014), ‘Peak finance’ (2014-2020), and ‘Collapse’ (2020-current)
- The industries in the biggest decline are financial management, auxiliary financial services, and credit granting
- The number of banks has decreased since 2020, but this is a long-term trend that predates Brexit and the pandemic. The decline of high street banks contributes to the UK finance industry’s contraction, but it is not responsible for it
- Mortgage finance is the fastest growing business type, a reflection of rising interest rates and a steady housing sector
“The simple truth is that the UK finance industry is declining and there are numerous underlying conditions beyond Brexit, the pandemic and economic recession,” comments Jens Bader, The Payments group CEO.
“The Government needs to act to ensure that one of the UK’s strongest sectors does not continue to decline. We cannot allow American card giants and tech brands to run roughshod over UK financial institutions, retailers and consumers as they are doing today.
The impact of an even weaker and even smaller UK finance sector would ripple throughout the entire UK economy.”
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