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R3 doubles down on London as post-Brexit technology hub

R3 has reaffirmed its commitment to London, doubling the size of its London Wall hub to accommodate its rapidly growing engineering team. The extra space will also support an aggressive hiring plan to increase the company’s global headcount from its current level of 215 to nearly 300 by the end of the year. The firm’s roster of new hires will consist largely of software engineers, along with commercial and client-facing roles around the world.

This initiative is a cornerstone of R3’s rapid growth plans that include an additional engineering centre in a new city by the early of 2020. R3 is currently evaluating the best location for the second site and will make that selection in the coming months.

The expansion represents a strong commitment from R3 to London. London has gained a reputation as a global technology hub and last year, despite the ongoing uncertainty of the Brexit negotiations, attracted more Foreign Direct Investment than any other city. It was independently ranked as the top global fintech hub by EY and Deloitte and hosts over half of FinTech50’s leading fintech firms.

While enterprise blockchain is still in its early years, it is now being deployed by some of the world’s largest companies across sectors as diverse as healthcare, insurance, capital markets and global trade. R3’s Corda blockchain serves as the foundation for many of these initiatives, becoming one of the leading blockchain platforms for enterprise use. The growth of the engineering team will ensure that the hundreds of businesses who build their applications on Corda can continue to deploy blockchain solutions simply and successfully.

David E. Rutter, CEO of R3, said: “There is enormous opportunity for London post-Brexit. While there clearly remain some uncertainties, we believe the city is well placed and established to thrive in the coming years. That’s why we are confident in making this substantial long-term commitment now.

“R3 is committed to ensuring the technology underpinning Corda is cutting-edge. To continue to do this, we need the very best people. It makes complete sense to look to London as we further develop the ways that blockchain can be developed and deployed.  As our software gains more use cases and across more sectors, we will be looking to invest further in top talent – London and elsewhere.”

Banks and leading investors back Mosaic Smart Data

Mosaic Smart Data has completed an USD 9 million investment round to support its rapid product development and global expansion. The round is co-led by CommerzVentures and Octopus Ventures and includes J.P. Morgan – an existing investor and client.

Daily trading activity in the capital markets generates vast quantities of raw transaction and pricing data. Institutions are increasingly looking to extract the value from this, largely untapped, data asset. Annual spending on data analytics and market data has now grown to over USD 30.5 billion a year.1 Being able to refine this raw data and distil it into meaningful ‘Smart Data’, where value can be extracted in the form of actionable insights, is a significant challenge that all market participants face, but success offers a proven and compelling competitive advantage for both buy-side and sell-side.

Mosaic Smart Data’s solution cleanses, normalizes and enriches this raw data and provides a consolidated real-time view and analysis across the flows of market activity. Mosaic’s advanced suite of machine learning models identify and alert the user to opportunities and threats, generating actionable insights specific to user job functions from sales and trading to management and compliance.

The firm provides analytics technology suitable for investment banks, buy-side firms, custodians, ECN’s, exchanges and regulators.

Heiko Schwender, Principal at CommerzVentures, said: “Data analytics is becoming an integral part of every industry and the capital markets are no different. We will soon be at a position where it is a prerequisite for performance in the markets. This presents a huge opportunity for Mosaic Smart Data, which has built a platform which sets the gold standard for capital markets analytics. We are thrilled to be part of Mosaic Smart Data’s journey.”

Warren Rabin, Co-Head of Global Macro Sales and Marketing at J.P. Morgan, said: “Today’s financial markets are awash in data at a scale never seen before, but what really drives performance is being able to extract truly actionable insights from that data in real-time. Tools like this that quickly make sense of vast data sets are changing the way our teams respond and operate and are going to become a differentiating factor for banks as they look to add value in their client discussions.”

Zihao Xu, Future of Money lead & early stage investor at Octopus Ventures, said: “One of the most exciting applications of artificial intelligence is combining it with human intelligence to create something which is more than the sum of its parts. Mosaic Smart Data’s machine learning models surface data insights that even the best human quant may not spot, delivering them to staff in a way which lets them act immediately. That is a powerful combination to drive productivity and performance across FICC markets globally.”

Matthew Hodgson, CEO and Founder of Mosaic Smart Data, said: “Mosaic Smart Data’s mission is to empower financial market professionals with usable, data-driven tools to ask the questions they need answered and to receive those results in a language they can understand. We want them to feel as though they have the firm’s best quant sitting at their desk 24/7, able to answer any question they have almost instantly. That is the power of smart data analytics.

“This is a mission which is driving incredible interest among the world’s leading financial institutions. With the support of these investors, we’ll be able to take full advantage of the opportunity, accelerating deployment of the Mosaic Smart Data platform for clients and ensuring we keep the platform at the cutting edge of data analytics R&D and smart data technology.”

UK Remains at the Forefront of the Fintech Revolution

Despite fierce competition, the UK remains at the forefront of the fintech revolution according to the ‘Finance for Fintech’ report, launched recently by London Stock Exchange Group and TheCityUK.

The independent survey, carried out by YouGov, interviewed over 400 fintech companies across eight countries, all of which have had at least Series A funding rounds or above, and provided interesting insights into the global fintech scene.

Bullish UK fintech scene

UK fintechs are bullish about their growth prospects.

The research highlighted that fintech companies operating in the UK expect to grow by 88 per cent over the next three years, 8% higher than the overall average.

Vital to this growth is raising finance and this process is reportedly more straightforward for UK fintechs in public markets than those operating in other countries, making it an attractive location for fast-growth companies. Chancellor Philip Hammond recently supported this view, pointing out that investment in UK fintech more than doubled last year, outpacing the funding of EU rivals such as Germany.

Interestingly, fintechs surveyed placed the UK as the third best  location for businesses seeking to grow their international footprint, only behind the US and China.

Fintech Revolution in Europe?

That said, competition is heating up.

Europe increasingly seeks to strengthen its position as a regional fintech hub. On 8 March, the European Commission announced an action plan on how it will do just that; new rules that will help crowdfunding platforms to grow across the EU’s single market.

The impact of this will be interesting as one of the primary barriers to fintech growth is competition according to 43% of those surveyed.

Regulation

Fintechs require a supportive global regulatory environment to flourish.

You have to applaud the FCA’s exploration of a potential global regulatory sandbox following the success of its UK version. The UK version, launched in 2016, helped fintechs to test innovations with real customers in the live market but under controlled conditions.

The global sandbox could allow firms to conduct tests from London into different jurisdictions at the same time, enabling regulators to collaborate to solve cross-border problems.

This has the potential to strengthen London’s position as a destination for global fintech companies as they can come from all around the world to test their products and find out how they can expand internationally.

Fintech is by definition without borders.

The research shows that fintechs across the world are becoming increasingly cross-border in their growth aspirations with 72% of the 400 companies surveyed planning to expand into new countries. 73% believe they will need to move into new or develop existing market sectors in order to achieve this growth and almost three-quarters believe long-term growth will be driven, at least in part, by new technologies.

It is worth noting that those who have reached Series D rounds or above have the biggest appetite for expansions and anticipate achieving a monumental growth of 320%.

While fintechs seek global expansion, it is important they don’t lose sight of the importance of being located close to the core financial hubs as crossover will, by and large, determine their success.

It is clear that in order for fintechs to thrive and continue to transform the global financial services sector, they need access to finance, a supportive global regulatory environment and proximity to the global financial services sector. The UK currently offers all three.

The report demonstrates that while the UK remains at the forefront of the fintech revolution, it must continue to innovate and work collaboratively in order to maintain its leading position, especially with Europe hot on its heels.

 

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