Cameron backs UK fintech 2020 manifesto
Fintech association Innovate Finance has launched UK Fintech 2020, a manifesto that sets out goals for the UK to be a centre for financial services. These include calls for increased investment in fintech, efforts to attract more fintech firms and the creation of more jobs in the sector.
Innovate Finance is supported by the UK government, which is currently seeking to increase the UK’s position as a financial services hub. David Cameron, UK Prime Minister, referred to the project in positive terms.
“This government wants the UK to be the leading fintech centre in the world, that’s why, at the Summer Budget, we appointed a Special Envoy for this fast growing sector,” said Cameron. “I’m pleased that Innovate Finance’s manifesto has set such ambitious goals including the creation of 100,000 jobs. This will ensure we are a world leader in the development of financial services technologies.”
At present, fintech already generates £20bn of GDP to the UK economy and directly employs 135,000 people. According to Innovate Finance, the UK is top in Europe for fintech investment, taking 42% of all European fintech investment in 2014. Investment grew 136% in 2014, from $264m in 2013 to $623m 2014. Despite this, Silicon Valley still dominates globally, with fintech investment at over $2bn versus a European total of $1.48bn.
The specific goals of the Innovate Finance manifesto are as follows:
- Investment: For the UK to become the most investment-friendly environment for FinTech globally, attracting $4 billion of venture investment and $4 billion of institutional investment in corporate venture funds, accelerators and innovation programmes. This is up from a UK total of $623 million in 2014.
- Global FinTech Leader: For the UK to become the premier location for at least 25 global FinTech leaders, whether by IPO, global market share or by valuation. The success of this target will be supported by proportionate and effective regulation, a proactive policy environment and a commitment to greater financial inclusion.
- Jobs: For the UK to increase investment in FinTech and develop more global leading companies that will generate 100,000 more jobs in UK FinTech. This will be supported by new FinTech apprenticeships and degree courses that will create the skilled workforce necessary to make the UK the global centre for FinTech.
Part of the impetus for the report is the contention that banks could be disintermediated by newer, more nimble entrants such as PayPal, Apple, Google, Facebook and Alibaba. According to a recent report by Goldman Sachs, $4.7 trillion in revenue for traditional financial services is at risk of being displaced globally by new technology-focused entrants.
“Utilising the increasingly global reach of technology, financial services are now becoming truly available to all consumers in all economies around the world,” said Alastair Lukies, chairman of Innovate Finance. “The UK has a critical role to play in ensuring financial inclusion, common standards, continued innovation and socially enhancing services for all. Today’s manifesto for 2020 states the UK’s intentions to be a global leader in FinTech, underpinning the important progress of this borderless market for generations to come.”