UK’s £11 billion fintech leadership bolstered by new review
An independent review, led by Ron Kalifa OBE, has set out a plan for the UK to retain its global leadership in fintech by helping the country’s financial technology firms to scale up, access the talent and finance they need, and deliver better financial services. The UK has more than 10 per cent of the global market share in fintech and the sector is now worth more than £11 billion a year to the UK economy.
The independent review finds the UK is at a pivotal moment and presents a wide-ranging strategy and delivery model to build on its existing attractiveness to start-ups firms and become the best place for a fintech business to reach global scale.
It marks an important step in the Chancellor Rishi Sunak’s plan to make the UK the most open and dynamic place in the world to operate a financial services business. The government will now examine the recommendations and respond in due course.
The review highlights the opportunity to create highly skilled jobs across the UK, boost trade and extend a competitive edge over other leading fintech hubs. Recommendations include:
- introducing a new ‘fintech scale up’ visa route for specialists from around the world
- implementing a ‘scale box’ to provide regulatory support for growing firms
- improving UK listings rules with free float reduction and dual class shares
- creating a £1 billion-pound fintech ‘growth fund’ to help firms grow independently
- establishing a private sector-led Centre for Finance, Innovation and Technology to support national coordination and growth in fintech across the UK
Rishi Sunak, Chancellor of the Exchequer, said: “Fintech is one of the UK’s great success stories and will help us seize new opportunities around the world. We must now build on our global reputation for fostering innovative start-ups and ensure firms can access the talent, finance and support they need to scale up here in the UK. This review will make an important contribution to our plan to retain the UK’s fintech crown, create more skilled jobs, and deliver better financial services for people and businesses.”
Ron Kalifa OBE said: “Fintech has the power to change lives, both in terms of job creation and better wages that are so essential to our recovery; and making financial services more accessible and relevant to people’s lives.
Britain has a proud record of starting-up and scaling-up some of the best known fintech products, but we cannot rest on our laurels. The next powerhouses will not be created by accident.
We must continue to nurture our start-up culture, but crucially we must also give our high growth firms the support to become global giants.
With the right reforms that encourage entrepreneurialism, investment and make it easy to attract and invest in talent, Britain can usher in a period of dominance that can help us build back better from Covid-19.”
About the Ron Kalifa Review
In 2020, investment into UK fintech stood at $4.1 billion in 2020 – more than the next 4 European countries combined.
The strategic review produces a five-point plan to help mitigate risks and take advantage of the opportunities in the global economy:
- Policy and Regulation – dynamic leadership that protects consumers yet enables fintech activity and encourages competition
- Skills – ensuring fintech has the right supply of domestic and international talent and the means to train and upskill our current and future workforce
- Investment – completing the funding ladder from start-ups right through to IPO
- International – a targeted approach to exports and inward investment
- National connectivity – leveraging the output of fintechs across the UK and facilitating connectivity amongst them.
The Review secretariat was provided by Innovate Finance and City of London Corporation.
Stakeholders welcoming the review included:
TS Anil, Monzo CEO who said, “at Monzo, we are proud to be part of an industry that is always working to change finance for the better and give consumers more options. It is why we are supportive of these recommendations which would help the next generation of financial technology companies get off the ground, while enabling established companies, like Monzo, to take it to the next level.
The independent review’s full report can be read here.
