Budget 2021: The fintech industry reacts
Rishi Sunak, the UK’s Chancellor of the Exchequer, announced his second Budget this week. And while the word “fintech” fails to appear in the Chancellor’s budget even once, that hasn’t stopped those in the industry pontificating on what its impact may be.
At FinTech Futures we undertook our own analysis of the Budget, which covers the headline changes in detail.
We’ve also received input from across the market, with predictions on how the new Budget may affect the industry going forward. So we picked out the best opinions and analysis.
The “Fast Track” visa scheme
The new visa scheme has come as welcome news to many in the industry.
Jed Rose, general manager for EMEA at Airwallex, says attracting and retaining world-class tech talent “accelerates the UK’s ability to innovate in the business banking sector.”
He adds: “Losing access to global talent would be a huge blow for UK-based fintech companies.”
TransferGo CEO Daumantas Dvilinskas agrees, but adds true innovation comes from diversity of thought and background.
“As a migrant myself, the Budget was missing this final piece: a reassurance to foreign talent that there is a home for them in the UK fintech community.”
Mike Laven, CEO of Currencycloud, says the new visa scheme is an important first step in the right direction, but adds that it doesn’t go far enough.
He says: “Fintech is a highly specialised field and one where the UK is world-leading. Therefore, tailored measures catering to its unique needs are vital to ensure UK fintech continues to innovate, flourish and remain competitive.”
SME support and Recovery Loan Scheme
The Recovery Loan Scheme succeeds both Coronavirus Business Loan Interruption Schemes (CBILS) – large and small – as well as the Bounce Back Loan Scheme (BBLS).
Under the new recovery scheme, businesses of any size can apply for loans as small as £25,000, all the way up to £10 million, from 6 April until 31 December.
Daniel Layne, CEO at QV-Systems, says it’s encouraging to see small businesses “have been at the heart of so much of the Chancellor’s Budget announcement.”
He add that the pandemic has hit SMEs hard. “But they will play a vital role in economic recovery as the country begins to return to normality.”
Luke Davis, IW Capital’s CEO, says SMEs need further support, such as an extension to the Enterprise Investment Scheme (EIS).
“Increasing income tax relief from 30 to 40% for EIS could provide a 10x return on investment. And would increase the appetite to invest in growth sectors. Which furthermore would create jobs, boost recovery and enable future growth.”
Layne also hails the creation of the new Help to Grow project. He says it shows the government’s “understanding of the role technology plays in growing modern businesses.”
He adds that a commitment to equipping SMEs with the right software and digital technology is key.
Future Fund and the Kalifa report
Zumo’s CEO Nick Jones welcomes a £375 million injection and expansion of the Future Fund. He says it has the potential to “turbo-charge the start-up and fintech landscape in the UK”.
Jones adds that this is an opportunity to increase diversity within the industry. It could be a “step-change” for start-ups, argues Jones. He adds: “We need to ensure we are doing all we can to drive broader representation within the industry.”
Fintech was served a taste of the UK government’s plans for it in the shape of the Kalifa report.
It whet appetites for more information in the Budget. But it saw a few also disappointed more information wasn’t forthcoming.
Currencycloud’s Laven says many within the fintech industry “would have liked to have seen more of the considered policies outlined in Khalifa’s’ review implemented in the Budget.”
James Lynn, co-CEO of Currensea, also says people expected more on technology innovation in the Budget. Especially a focus on open banking.
“Open banking still feels very new, even though it was legalised back in 2018. This is because it has been down to innovative young fintechs to build out this infrastructure from scratch.”
TransferGo’s Dvilinskas calls the Kalifa report “a commitment to long term investment”. He says there is “no doubt” behind its intentions.
Joanne Dewar, CEO at Global Processing Services (GPS), is looking forward to supporting the implementations laid out in Kalifa’s review.
She thinks it sets out a “clear pathway”. One which will ensure “the UK fully capitalises on the global economic opportunity ahead”.
Luc Gueriane, Moorwand chief commercial officer and FinTech Futures’ resident agony uncle, says it would have been good to see more support for the industry in the Budget.
“The fintech sector has generated hundreds of new solutions and tens of thousands of new career opportunities,” he says.
“[This] in turn has driven huge economic prosperity for the country and helped us to sustain the reputation as a fintech hub of Europe.”
As European countries prepare to compete with the UK, he adds, the sector needs plenty of government support to retain its crown.