The UK financial services sector has lost nearly 10,000 businesses since 2020, marking an 11% contraction from its peak, according to a report published by The Payments Group (TPG), a Frankfurt-listed payments provider.
The report, Beyond Peak Finance, describes the post-pandemic decline of UK finance as being in “freefall” and warns of the growing dominance of US technology companies such as Apple and Google in the payments space.
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Using data from the UK Office for National Statistics (ONS) covering business trends from 2010 to 2024, the report highlights industry consolidation, business failures and the impact of financial technology on legacy sectors. It also calls for stronger regulatory oversight to safeguard the UK’s position as a global financial hub.
Key Findings:
- The number of UK finance businesses peaked at 88,875 in 2020 but has since declined by 9,835, an 11% decrease.
- Since the 2008 financial crisis, the UK finance sector has experienced three distinct periods: ‘Slow Growth’ (2010-2014), ‘Peak Finance’ (2014-2020), and ‘Collapse’ (2020-present).
- The steepest declines have occurred in financial management, auxiliary financial services, and credit granting.
- While the number of banks has fallen since 2020, this trend predates Brexit and the pandemic, with high street bank closures contributing to but not solely driving the sector’s contraction.
- Mortgage finance has been the fastest-growing business type, reflecting rising interest rates and the relative resilience of the UK housing market.
Jens Bader, CEO of The Payments Group, said: “The simple truth is that the UK finance industry is declining, and there are numerous underlying conditions beyond Brexit, the pandemic and economic recession.
“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 Payments Group operates across the European Economic Area (EEA) and is headquartered in Frankfurt. TPG provides a wide range of financial services, including embedded financial services, prepaid technologies, and global payment and payout solutions. TPG owns four fintech providers and a venture capital arm. Its subsidiaries include Funanga AG (Germany), TBWS Ltd (Malta), Calida Financial Ltd (Malta) and Surfer Rosa Ltd (Isle of Man).
