UK fintech companies raised £1.8 billion in the first half of 2026, the lowest since 2016 and down by almost two-thirds from £5 billion a year earlier.
The panel that took the story apart did not read it as capital leaving the sector. Deal count fell to 205 from 281, but late-stage venture debt hit a record over the same stretch, and money that once went to fintech now goes to defense, AI and cyber.
"But I don't think there's less available capital — it's clearly that there's a challenging deployment cycle right now."
Joe Parkin founded and exited the Fintech Growth Fund, the growth-stage vehicle the Kalifa review called for, and ran BlackRock's iShares ETF business in the UK before that. Clare Black runs the industry body the same review created. Blake Hutchison has just raised $28 million to take an Australian payments platform into the United States.
I listened to the full episode so you can skip it. 59 minutes of audio, 20 minutes of reading.
Here are the 12 takeaways that matter.
👤 Guests: Clare Black, chief operating officer of the Centre for Finance, Innovation and Technology, the neutral convener set up after the Kalifa review; Joe Parkin, managing partner at FG Partners, who founded and exited the Fintech Growth Fund and ran BlackRock's iShares ETF and digital wealth businesses; Blake Hutchison, chief executive for North America at Pay Rewards and previously chief executive of the business-sales marketplace Flippa
🎙️ Host: Kate Moody, customer strategy director at 11:FS
👥 Also on: Emily Stokes, product delivery manager in NatWest's Open Innovation team, in a voice note recorded for the show
📰 Published: 30 August 2026 on YouTube (Fintech Insider Podcast by 11:FS)
🔴 YouTube | 🔗 Episode page | ⏱️ 59 min | ✅ Time saved: 39 min
Key Takeaways
UK fintech's £1.8B half-year is the lowest since 2016, and deal count fell with it
205 deals across M&A, private equity and venture capital, against 281 a year earlier
The panel's reading is that the capital did not leave, it changed form
Late-stage venture debt hit a record while equity funding fell by two-thirds
Defense, AI and cyber now compete for money that used to be fintech's by default
Founders are being judged on capital efficiency before they are judged on growth
NatWest is the first UK bank to put itself inside the Be My Eyes app
A selected group of customers can video-call a trained colleague for help reading a letter or activating a card
Banking treats capacity as binary, and that is what makes accessibility fail
The workaround is people sharing PINs and cards with family, which carries its own risk
Expanding out of the home market is the hardest thing a fintech does, and the US is the hardest first market
Checks are still 27% of US business-to-business payments volume, which is the opening Pay Rewards is aiming at
A meme coin raised more for a 60-year research project than its OnlyFans account did
1. A decade low in UK funding
The show opened on a Finextra story: UK fintech companies raised £1.8 billion in the first half of 2026, the lowest since 2016 and down by almost two-thirds from £5 billion in the first half of 2025. Deal count fell to 205 across mergers and acquisitions, private equity and venture capital, from 281 a year earlier. AI was the exception, taking £450 million across 79 deals, about a quarter of the total, up from £382 million across 67 deals.
Parkin read it as part cycle and part structure, and said he was not surprised. He called himself a passionate advocate for UK fintech and said he hopes it is a blip, while treating several of the causes as long-running
Companies are not fundraising aggressively. Founders have extended runway and become more frugal, a theme of the past 18 months that he said is only now showing up in the numbers, with top-tier AI companies the exception
Money that would once have gone to fintech is going to the European defense market, to AI and to cyber, at the same stage of the funding cycle
Government policy is the part he treats as structural. "I think we've done well despite what's happened, but I think government policy has made the UK a very hard place for people to build businesses and come to invest over the last two, three years." He traced the start of it to Brexit, which he said was never going to be good for financial services or fintech
The regulator has lost some standing, on his account: "I do think it's coming back to where it was, but I don't think it's as revered as it has been." Ten years ago, he said, the Financial Conduct Authority was on top of its game globally
The UK is no longer a clear second behind the United States, he said, with parts of Europe caught up, the Middle East catching up quickly and parts of Asia doing interesting work
Domestic capital is the other gap. Defined-contribution pension money is starting to come through after the Mansion House reforms, but risk appetite in both public and private markets is still short, and the best UK businesses keep listing abroad and taking overseas money
"So from my perspective, I wasn't surprised by this — I do hope it's a blip, but I do think there's a number of contributing factors here pulling in that direction."
2. The sector grew up
Black's reading is that a fall was the expected consequence of maturity. She was in UK fintech 10 to 12 years ago, when the regulator and the industry came together in what she called its heyday; the sector now has unicorns and large corporations in it, and consolidation with them
The UK's protection is breadth. She said its fintech is spread across many areas of financial services rather than resting on one big unicorn in one sub-sector, which shields it from shocks and falls in funding
Other regions spike when one large domestic fintech succeeds in a single area such as payments or capital-markets infrastructure. She said the United Arab Emirates overtook the UK momentarily in one quarter, last year or the year before
She expects the label to fade. At Innovate Finance she and colleagues would ask when the sector would stop saying fintech and simply say "innovation in financial services", and she thinks it is close to that point
The warning she took from the numbers was against complacency, a point she credited to Janine at Innovate Finance, speaking at this year's IFGS conference: "we can't rest on our laurels, we can't become complacent with that second position because there are others snapping at our heels"
3. The capital hasn't left
Hutchison's view is that the money is still there and the deployment cycle is what changed. "But I don't think there's less available capital — it's clearly that there's a challenging deployment cycle right now."
The measure applied to a founder has moved: efficiency, disciplined use of capital, a clear account of how the business makes money, and a date at which profitability shows up
That makes it harder to raise for a founder who has a vision but weaker evidence of how the capital will be or has been used, whether it is a first round or a later one
He described the problem as a funnel — first evidence that the business model can be sustained, then proof customers will buy the product, then the conversation with investors about whether the traction stacks up economically
Customer acquisition sits above all of that and is harder than it has ever been, he said, so the fundraising climate is not the only thing that is challenged
He wanted a figure nobody had: capital reserves against actual deployments, on the suspicion that funds are sitting on dry powder and waiting for the right opportunities
4. Debt is filling the gap
Parkin came back to what else is competing for the money. Five years ago there was no European defense market of the kind that exists now, and AI is the other draw; he said financial services, the Premier League and universities are the three things the UK does really well and has exported for a decade
The rise of debt is the part that changes how the funding number should be read. "The other thing I'd say is just around debt — I do think I've seen a massive rise in the use of debt by fintech companies over the last three years."
He said the KPMG numbers do not include the debt side, and that fintechs are taking debt to bridge a round or to avoid coming to market at a disadvantage — more debt means less equity, so "it kind of balances itself out"
Half the cause is supply, with a great deal of money going into private credit; the other half is founders becoming more sophisticated managers of capital
Black said the shift shows up in the debt market's own records: "I actually think late-stage venture debt just hit a record, so to Joe's point, it's different capital and different access to it."
Every bank is renewing its focus on it and there are a large number of venture debt funds
A US investor told her over the summer that three or four years ago nobody in UK fintech took debt or understood it, and that on later visits he found it prevalent and under consideration everywhere
Her conclusion was that the two numbers are the same story: "So I don't think it's a surprise that you've seen investment funding fall and people taking more debt instead."
5. NatWest joins Be My Eyes
The second story was NatWest's partnership with the accessibility platform Be My Eyes, a pilot giving blind and low-vision customers live visual assistance. NatWest says it is the first UK bank to use the platform's service directory and service connect, which let customers reach an organization directly through the app.
A selected group of customers can make secure video calls to trained NatWest colleagues, using a phone camera or smart glasses to show what they need help with, for everyday tasks such as reading correspondence or activating a new card
The service is free, needs no appointment, and does not ask customers to share a PIN, a password or other security details
Emily Stokes, who runs the delivery of it in NatWest's Open Innovation team, said the research came first. "We recently partnered with Be My Eyes because our research showed that blind and low-vision customers regularly encounter challenges in their everyday banking"
Customers told the bank they rely on friends, family or sometimes strangers for help, which she said affects "privacy, confidence, and also independence"
The bank already offers talking ATMs, accessible cards and statements, and a service called Banking My Way that records the support a customer wants
What the pilot is testing is where live visual support makes the biggest difference, and whether it lets customers bank with more confidence, independence and trust — Stokes described it as co-creating with customers rather than shipping a finished product
6. Where banking still fails
Black said she has a personal stake in this one. Her eldest son, now 28, has been blind more or less from birth, and she has watched both what technology opened up for him and where it still stops
"Where technology has helped and opened up innovation, we don't often think about how it cuts off access for certain segments of the population."
On his student account he could get braille statements, but they could not be requested online — he had to go into a branch, which meant finding someone to take him there
Cards now carry notches and braille. Identity verification is the current failure: a selfie is a regulatory requirement both for opening an account and for setting up a new payment, and whether his face lands in the frame is, she said, "just pot luck"
Her fix is employment rather than features: "So to be genuinely accessible, I think we as a society probably need to employ more people with different disabilities" — because that is what makes a firm think about access at the design stage
She has used Be My Eyes herself as a sighted volunteer, checking whether someone's shopping was in date or whether one color matched another, and dated the service at about ten years old
CFIT is building a new coalition around a supported payments framework for people with a learning disability
7. Partner, don't build
Parkin's complaint was that partnerships like this are far too rare. "We should be seeing three or four of these announcements a week"
The sticking points he has in mind are operational, cross-border or about disability, and there are fintechs solving them; what takes the time is matching a fintech to the problem, and often it never happens
He said he would like NatWest to come out once a week and name another problem it has solved for a minority of customers who cannot get access to something they need
Hutchison said partnering is the only route that works for a bank of that size. "I think someone like NatWest has too much going on, the priority list is too great, and their core customer use case is where they spend most of the time, so if you want to provide the right solutions to other cohorts, the only way to do that is to partner with a specialist"
Specialists have done the rigorous testing and spend every day with that customer type, so they get it right more often than not
An incumbent carves out a small team and hopes it can make the product stick, and the team is unlikely to get the focus or the funding that something this sophisticated needs
He also noted that few fintech podcasts spend any time on accessibility announcements
8. Accessibility is fragmented
Moody put the counter-case to the panel: a partnership model risks pockets of utility assembled in bursts rather than coherent, connected journeys that solve several problems at once. She then called her own question "more like a brain dump"
Black's answer was that the binary treatment of capacity is the root of it. Needs differ completely between a visually impaired customer, a hearing-impaired customer and someone with a learning disability, while the banking system asks only whether a person has capacity or does not — and the formal route from there is legal and heavy, lasting power of attorney or deputyship
So people build informal workarounds that carry their own risk, sharing PINs and sharing debit and credit cards so that children or elderly parents can reach money
The solutions available until now, she said, take independence and power away from the person being protected
CFIT's supported payments coalition puts the big banks, the disruptors, the FCA and UK Finance around one table
The narrow starting point is deliberate. Solving it for people with a learning disability, she said, carries over to elderly people who are not confident with digital banking and to people with dementia or fluctuating capacity
The shape she imagines is an overlay that sits alongside a customer's existing accounts rather than being tied to one bank, with AI allowing each person to choose the kind of help they want — though she said she does not know how the security implications of AI in banking get resolved
9. Pay.com.au heads for the US
The final main story was Hutchison's own: Pay.com.au has raised $28 million in Series E funding to launch in the United States under the Pay Rewards brand. The company says it is Australia's largest payments and rewards ecosystem, serving more than 30,000 businesses and processing over $7 billion of business expenses in the past 12 months.
The product pays points on business payments that normally earn none, including bank transfers, on top of the rewards a business already earns on its cards. Points redeem through airline and hotel partners, gift cards, employee incentives, concierge redemptions, or as credit against other invoices
Hutchison described the mechanics plainly: a small business owner pays a bill by bank transfer or card, chooses one point per dollar or two points per dollar, and moves the balance to one of many providers once it is large enough
He said the category has been fast-growing and neglected at the same time, and that Pay Rewards is a rewards-first payables engine rather than a payables platform with a loyalty feature bolted on
His market figures were the argument for the move. Hutchison said "the global B2B payments market is $110 trillion in 2026, but it's forecasted to grow to just short of $300 trillion by 2034", with a migration under way from traditional payables and receivables into digitized, automated platforms
The opening he is aiming at is how American businesses still pay. "One thing that's really incredible is that there's a lot of businesses still paying by check here in the US — 27% of B2B payments volume in the US is check, and sub-7% of B2B payments are on credit card."
Moody's reaction was that check usage is the statistic that never stops surprising her, calling it a legacy payment method still in the ascendancy
He also said loyalty is a national pastime in the United States and most Americans carry several co-branded credit cards, which is the demand side of the same bet
10. Why the US before the UK
Parkin's frame was that this is the hardest thing a fintech attempts. "And by the way, this is probably the hardest thing that a fintech ever does — expand out of its core market, and then the first market you go into is the toughest market in the world to crack, because the competition's so high, you really have to be prepared"
He said there is "a graveyard" of UK fintechs, and fintechs elsewhere, that tried the United States and failed. The obstacle is not language, regulation or government interference, as it can be in Asia — it is competition
What gave him confidence in this case was an experienced team that has done it before
Hutchison's reasons were about the loyalty market, not the payments market. US business travel is expensive and travel spending runs through cards and loyalty programs, while UK travel is cheap because of geography and the competition among low-cost carriers
Small businesses look and behave like consumers, he said, but the payables workflow has never had a rewards ecosystem around it
Pay.com.au works closely with American Express in Australia, which sees large volume from the platform. He said that brings advice, endorsement and subject-matter expertise, and was careful to say Amex did not force the company's hand
"Yeah, I guess our ego is big enough to go after the biggest market."
Black asked whether the UK was considered first, noting that international fintechs have historically come to the UK before the United States. Hutchison said it was considered and still is, and that doing well at home gives them the optionality
Her tangent from it was about incentives for small businesses. CFIT's third coalition looked at why UK small and medium-sized enterprises fail to get credit — usually not a bad credit score but the wrong data pulled together at the wrong time — and built a proof of concept for an AI financial coach with the credit reference agencies, Companies House and the banks
The obstacle was that SMEs are busy and dislike both the accounting and the credit application, so the coalition's question became what would tempt them in. She said a rewards system of the kind Hutchison described could be that incentive
11. Nationwide's credit score
Nationwide has added a credit score tool to its mobile app and online banking. Customers can check their score without affecting their credit rating, and the tool explains the factors that influence it
The FCA research behind it found that 66% of people who check a credit report or score do so to get an overall picture of their financial situation, 41% do it out of curiosity and 20% to understand their eligibility for credit
The building society plans further educational content on borrowing, saving and money management, developed from customer research and feedback, and says it will pay particular attention to vulnerable customers
Moody's read is that the number is the easy part and the context is the product. Several UK banks now build a credit score into the app, so what matters is what Nationwide builds around it, and she credited the firm for being alert to customers reacting badly to a score they cannot interpret
12. A meme coin funds marmots
The last story, from The Guardian, was a 60-year study of yellow-bellied marmots in Colorado that faced closure after cuts to US federal science funding. The researchers opened an OnlyFans account, which raised about $6,000. Outside supporters then created a marmot-themed meme coin on the Solana blockchain and donated the transaction fees, which generated more than $88,000 in two weeks. With other donations the project has passed $100,000 and can run for another year.
Parkin's read was that the lesson is engagement rather than the funding route. He compared it to what he calls the "meerkat moment" in UK insurance, when people bought car and home cover because of an advertising campaign and its toys, and a purchase people avoided became a default
"I'm not necessarily suggesting we do anything more with OnlyFans, but I then think this is a really positive thing for the financial services industry, because we're often a bit boring."
His examples of what needs the same treatment were pensions and saving for a child's future
Black was blunt about the mechanics: "I obviously don't know enough about blockchain, because it seems ludicrous to me that they can raise that much money off one meme coin." Asked whether CFIT would look at it as a funding structure, she said it would have to go through the organization's "AI hopper" to see whether it meets the criteria
Hutchison's deadpan answer was the segment's joke: "Look, I'm here to announce $20 million in USD funding through an OnlyFans account."
Asked whether transaction fees could fund charities and research more generally, he said he assumed a fairly established industry already exists around using crypto wallets as a donation mechanism, and that he would have to go and check
Moody had found one: FreeWill, which she said liquidates any of 300 different cryptocurrencies into US dollars for immediate distribution to a charity. She said she was not endorsing it
Bonus Insights
Black's route in was journalism. She spent time at Reuters, then worked in capital markets and derivatives as a consultant, moved to the innovation side in 2018 when she joined Innovate Finance, and has been at CFIT for 18 months
CFIT is an independent, neutral convener created out of the Kalifa review, funded by HM Treasury from the start, and has been a delivery partner for the Department for Business and Trade's smart data strategy on the home-buying process. She called the convening work "supreme cat herding"
Its next move is from convening into delivery, with industry and government co-investing where there is market failure
Parkin ran the iShares ETF and digital wealth businesses at BlackRock before founding and exiting the Fintech Growth Fund, itself one of the main recommendations of the Kalifa review, which invested at Series B and above in companies with five to ten million of revenue. He now holds non-executive roles across wealthtech, data and reporting, a UK accountancy firm, an emerging-market ETF business, a digital bank and a proptech
Hutchison came to payments from marketplaces: partnerships at Xero, then the flash-sale luxury travel business Luxury Escapes, then chief executive of Flippa, which he said helps 13,000 business owners exit every year
The advertising analogy had an Australian footnote. Hutchison said the number one competitor to Compare the Market in Australia was Selectr, founded by the same person who founded Pay Rewards
The closing round asked each guest what their own meme coin would fund. Black's was $Alpaca, to pay for the luxury yarn she buys as a knitter; Hutchison's would cover his Melbourne-to-Dallas commute every four weeks; Parkin's was a "Squirrel Save Your Acorns coin" for teaching children about saving and spending; Moody's would fund her pizza consumption
The panel's bottom line on the funding story is that a decade-low £1.8 billion records a change in the form of capital and in the competition for it — debt instead of equity, defense and AI instead of fintech — rather than a sector in retreat.
Products, Companies & Tools Mentioned
CFIT (The Centre for Finance, Innovation and Technology, which Black runs day to day: an HM Treasury-funded convener created by the Kalifa review, now moving into delivery and running coalitions on supported payments and SME access to finance)
NatWest and Be My Eyes (The bank and the accessibility platform behind the pilot — NatWest says it is the first UK bank to use the service directory, and Black has volunteered on the app herself)
Pay Rewards (Hutchison's rewards-first accounts-payable platform, launching in the US on $28 million of Series E funding after serving more than 30,000 Australian businesses)
American Express (The strategic partner that sees large volume from Pay.com.au in Australia; Hutchison said its advice and endorsement helped, but did not force the choice of market)
Nationwide (The building society that added a free credit score tool to its app, the second-tier story of the week)
Solana and OnlyFans (The blockchain that carried the marmot meme coin and the subscription platform the researchers tried first; Black called the sums involved ludicrous)
FreeWill (The crypto donation platform Moody turned up during the show, which converts 300-plus cryptocurrencies into dollars for a charity)
Innovate Finance (Where Black worked from 2018, and where the question of when the industry stops saying "fintech" was first put to her)
BlackRock (Where Parkin ran the iShares ETF and digital wealth businesses before founding the Fintech Growth Fund)
Flippa (The business-sales marketplace Hutchison ran before Pay Rewards, which he said helps 13,000 owners exit a year)
Compare the Market (Parkin's analogy for making a dull financial purchase engaging — the campaign he calls the meerkat moment)
Books & Resources Mentioned
Pulse of Fintech – KPMG (The half-yearly report behind every funding figure in the first segment, including the £1.8 billion total and the 205 deals)
UK fintech funding hits lowest level in a decade – Finextra (The write-up of the KPMG figures that the show read out to open the episode)
Pay.com.au brings Aussie rewards platform to the US – Finextra (The source for the third story, on Hutchison's Series E and the US launch)
Scientists who turned to OnlyFans to fund marmot research receive crypto boost – The Guardian (The closing story, and the source of the $6,000, $88,000 and $100,000 figures)
The Kalifa Review of UK FinTech – Ron Kalifa (The 2021 review that produced CFIT and the Fintech Growth Fund, cited by two of the three panelists as the origin of what they do)
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