Five fintechs closed down their UK operations this year.
It’s been another year of ups and downs and, while funding for fintechs has undoubtedly improved, we still said goodbye to some familiar names in the industry.
So in this article, we take a look at the five firms that went out of business and examine why.
The decision was prompted by Scalable looking to consolidate all its German, French, Austrian and Italian customers onto a single platform, with the UK getting cut as a problematic outlier.
Scalable didn’t shut down entirely in the UK; it still operates an office here and runs a B2B technology service for clients like Barclays to build and launch their own digital wealth offerings.
Still, not a great start for digital wealth players, and Scalable wouldn’t be the last to leave the UK in 2021…
Next up came the shocking decision of NatWest to shutter its alternative lending brand Esme Loans in March, also exclusively revealed by AltFi.
While NatWest CEO Alison Rose had already demonstrated her willingness to pull the plug on flanker projects like Bó, the surprise with Esme was because most had thought the project a reasonable success.
Esme had originated upwards of £100m of loans for small and medium-sized UK businesses, and a significant marketing effort had established the brand among the SME community.
However, NatWest said the time had come, and it was “prioritising our investment spend across the bank”, resulting in the decision to wind down Esme.
This is a sad departure, as it signals one of the last major PFM (personal finance management) apps being shut down.
Sadly, all have now met their demise. The PFM category of apps has essentially disappeared, with most modern banking apps now including built-in analytics and categorisation, duplicating much of the functionality these apps had once offered.
Another example of a flanker brand from an incumbent bank looking to ride on a fintech trend, this time with Santander mimicking the functionality and usability of international payment challengers Wise and WorldRemit.
“To help support this growth, we have decided to integrate the PagoFX technology into our trade services business to leverage the fast and secure payment capabilities offered by the service,” a spokesperson said.
The news would disappoint few people, given PagoFX hadn’t been heavily marketed by Santander and counted just 329 ‘Likes’ on Facebook when it was shut down.
A final surprise departure to end the year came just earlier this month when Canadian digital wealth giant Wealthsimple decided that its operations in the UK had peaked.
While 16,000 customers and £272m in client assets might sound admirable, it was nothing compared to the C$15bn (£8.7bn) that Wealthsimple manages in its home market.