Nearly a third (32.2 per cent) of financial services companies have folded over the past five years, analysis from AptPayment has revealed.
The analysis, which examined data from Companies House, found since January 2019, 194,081 companies were opened in the finance industry.
However, since then, 62,531 of these firms have either gone into administration, liquidation, or are now dissolved.
In response to these findings, a spokesperson for the Financial Conduct Authority, said: "In a competitive market, new firms will enter, and some firms will go out of business.
“Orderly entry and exit are part of a well-functioning market. But disorderly failures can harm consumers, the effectiveness of markets, and overall confidence in the UK’s financial system.
“Where firms do fail, we want to minimise any harm to consumers and disruption to markets."
Additionally, the study found that banks are the hardest type of company to open, with a “business mortality rate” of 69 per cent.
Similarly, central banking-related companies are also less likely to be successful with 62.5 per cent closing their doors.
This was followed by companies dealing with the administration of financial markets, 57.4 per cent of which have closed down, building societies (57.3 per cent), and fund management (55.75 per cent).
In contrast, other holding, non-life reinsurance, construction holding, and mortgage finance were found to be the most successful kinds of companies with a mortality rate of 15.95 per cent, 23.3 per cent, 25.5 per cent, 26.31 per cent, and 28.57 per cent respectively.
A spokesperson at AptPay said: “Our research gives entrepreneurs looking to get into the financial services industry a clear idea of how successful their business is likely to be.
“But more than that, it gives business owners a real indication of how competitive certain sectors are.”
tom.dunstan@ft.com
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