UK government launches review to boost fintech sector
The UK government has launched a review into the country’s financial technology industry.
The economic secretary to the treasury, John Glen, announced the independent “Fintech Strategic Review” on 20 July.
The review aims to ensure that UK fintech has the resources to grow and succeed. It also wants to ensure that the conditions are right for the widespread adoption of financial technology, and that the UK’s global reputation for innovation is maintained and advanced.
This will be led by Ron Kalifa, former chief executive officer (CEO) of Worldpay, who will establish priority areas for industry, policy makers, and regulators to explore in order to support the ongoing success of the UK fintech sector.
“The sector is worth around £7 billion to our economy and will therefore be vital in ensuring both that the country bounces back post-coronavirus and continues to be at the forefront of financial innovation now we have left the EU,” says Glen.
“This independent review will help us to uphold and enhance our global reputation, support growing firms, and promote the integration of new technologies across financial services to the benefit of businesses and their customers.”
“Technology has a vital role to play in the UK’s COVID-19 economic recovery. The fintech review will ensure that we can leverage this innovative technology to help consumers and businesses, through a joined-up strategy that combines investment, skills and policy to deliver it,” says Kalifa.
Ritam Gandhi, founder and director of London-based tech business, Studio Graphene discusses the important timing of the news.
“The coronavirus pandemic has significantly accelerated demand for fintech,” states Gandhi.
“It has also exposed the issues that arise when banks rely too heavily on legacy IT and on-premise servers; namely, it is far more difficult for them to deliver a great service to their customers digitally without embracing cloud-based banking platform and progressive fintech solutions.”
Freddy Kelly, CEO and co-founder of Credit Kudos, says: “UK fintechs have been booming in recent years and we’ve seen a range of new, agile companies launching to challenge traditional financial services.”
“However, this sector is not just important to ensure individuals and businesses have access to better financial products, but – given its growth – it’s also vital to the strength of the UK economy. This review is therefore very welcome.”
First announced at Budget 2020, the intention of this review is to establish priority areas for industry, policy makers, and regulators to explore in order to support the ongoing success of the UK fintech sector.
The first meeting of the fintech review governance board took place on 20 July. It was attended by Glen and Kalifa as chair, with assistance from the secretariat led by Innovate Finance and City of London Corporation.
Its five workstreams provide recommendations on: skills and talent, investment, national connectivity, policy, and international attractiveness.
The UK government review will be independent and is expected to report back to HM Treasury at the start of next year.
The UK fintech sector attracted £4.1 billion in venture capital in 2019, and the market has been estimated to have grown by nearly 70% since 2015, as reported on the announcement.