EY is opening a new corporate facility in London’s business district to strengthen its ties with local finance startups.

The facility, which EY describes as a fintech lab, is the first of two that the Big Four firm is planning to establish in the U.K. The other will be located in Edinburgh and is scheduled to open its doors next year.

“The labs are set to be vibrant, strategic capabilities which will drive change and provide crucial support to the whole financial services market,” explained Mark Jannetta, a financial executive who EY recently hired to run its fintech labs in the UK. “I’m excited to help clients create more value and build on the UK’s reputation for innovation.”

EY’s London fintech lab will provide an environment where financial startups can meet with clients, potential investors and other stakeholders. Startup teams can also use the facility to brainstorm new product ideas.

For EY, the facility represents an investment in long-term revenue growth. Building relationships with London’s up-and-coming fintech players could lead to new deal opportunities for EY down the road. 

Fintech startups are emerging companies with new, high-tech financial products such as app-based savings tools. Such companies have experienced rapid growth in recent years, raising billions of dollars from investors and drawing millions of customers.

Some of today’s fintech startups may over time grow into major financial institutions with big consulting budgets. It’s a good idea for EY to build relationships with those startups early, a priority that its new fintech lab in London will advance.

EY already generates a significant amount of revenue from carrying out consulting projects for financial institutions. The Big Four firm helps banks cut costs, supports insurers’ digital transformation projects and works with private equity firms to increase the value of the companies they buy.

Over time, finance startups may also become a major source of revenue for EY if the fintech ecosystem maintains its fast growth. This market also presents opportunities for EY’s rivals in the Big Four group of leading accounting firms.

EY intends to pair its new London lab and the similar facility it will open in Edinburgh with a number of other investments. 

The Big Four firm is opening an innovation hub in Bristol that will assist financial sector clients with IT projects. Additionally, EY’s Seren product development and design consultancy is planning to set up shop in Edinburgh.

EY expects to spend several million pounds on these initiatives over the next 12 months. The size of the investment indicates that although it already has a significant market presence in the U.K. financial sector, the Big Four firm estimates there are still many growth opportunities left to address. 

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