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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 Prioritising Digital Transformation

Fintech has barely even got started if a new report from EY is to be believed. Less than 20% of banks believe they are doing enough as a business to invest in technology, according to EY’s Global Banking Outlook study. This, despite some substantial leaps forward in technological capability and significant investment.

To combat this, more than half of banks surveyed in the report expect budgets for technological investment to rise by 10% this year, and more than half of banks aspire to be digitally maturing or digital leaders by 2020. Banks appetite to invest and partner with fintech firms may in part explain why last year was a bumper year for fintech VC funding, with $1.8 billion raised by UK firms.

This new investment opens up major new growth opportunities for the already thriving financial technology market.

The impact of fintech is being felt in every part of finance, from retail banking to back-office compliance. But one of the key focuses for banks over the past few years has been using technology to try to deal with stringent compliance and regulation, which slows down, complicates and adds expense to transactions.

Solving this is one of the key promises of distributed ledger technology (DLT) which is being touted as a new way to create trust between institutions, lower compliance costs and create information sharing efficiencies. This year, we are likely to see the first examples of DLT moving from proof of concept into market operation.

Data analytics and machine learning are likely to be another hotspot of activity this year. Many banks have begun announcing project designs in all kinds of areas of the bank, from back-office automation to the use of machine learning to improve execution quality.

For example, JP Morgan is working with UK based data analytics company Mosaic Smart Data to unlock insights from its internal FICC data to improve client handling and FICC performance.

In trade finance, Previse is looking to end late payments for SME suppliers with its advanced machine learning and innovative finance model which creates opportunities for buyers, sellers and banks alike.

The last few years have seen an explosion in financial technology. However, emerging technologies begin to mature, and banks continue to strive to be more efficient and effective, it looks like the fintech surge is only just beginning.


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