KPMG’s ‘The Pulse of Fintech’ for Q4 2016 found that while the number of venture deals for UK fintech companies rose from 93 in 2015 to 96 last year, the value of investments dropped by $348m (approximately £280m) to just $609m (approximately £490m) over the same period. 

This decline comes amid questions over how last year’s referendum result would impact the UK’s access to talent and EU passporting.

Venture capital investment for US fintech companies also plummeted, falling from $6bn (approximately £4.8bn) in 2015 to $4.6bn (approximately £3.7bn) in 2016. 

Warren Mead, global co-leader of fintech at KPMG International and Partner, said: “There was a big rush of investment in fintech during 2014 and 2015 as investors globally bought into the idea of new and disruptive business models.

•   Robo-advisers to 'tread carefully' when buying IFA client books
•   Scotland to launch fintech accelerator
•   Online mortgage broker receives £4.5m backing

“Amid growing geopolitical and macroeconomic uncertainty, 2016 saw the investor sentiment tide turn, with investors seeming to want more proof that innovative solutions can be scaled and commercialised.” 

The news comes just weeks after a London conference was told that forward-thinking regulators had made the UK one of the most attractive places to launch fintech start-ups.

Patrick Imbach, head of tech growth at KPMG UK, added: “The UK government and regulator are committed to supporting and promoting the fintech sector.

“As well as launching the world’s first regulatory sandbox, the FCA has created fintech bridges with Australia, Singapore, Korea and China to strengthen regulatory collaboration and help fintechs scale internationally.”

Last week, the FCA signed a fintech co-operation agreement with the Ontario Securities Commission.