UK Fintech Investment Falls to Lowest Level in Decade after 64% Annual Decline

UK fintech investment plunged 64% to £1.8bn during the first half of 2026, marking the lowest level in a decade, according to KPMG's Pulse of Fintech H1 2026 report. The drop in funding was attributed to economic instability, the overwhelming dominance of AI, and other factors such as geopolitical tensions and rising energy prices.

While the UK attracted more fintech investment than any other EMEA economy during this period, its share of total funding fell to 22%. The number of deals, encompassing investment, mergers, and acquisitions, also declined year-on-year from 281 to 205, the lowest level in a decade. Analysts suggest that an improvement in the wider economic and political situation could help the sector, while UK fintech firms will need to work harder to stand out in an increasingly crowded market.

Despite a global rise in fintech investment, the Americas accounted for $80.8 billion of this total, driven by Global Payments' acquisition of Worldpay. KPMG's Head of Fintech, Hannah Dobson, suggests that AI may be partly responsible for the decline in non-AI fintech investment.