The much anticipated Fintech Review, led by Ron Kalifa, vice-chairman of WorldPay, was finally published today, arriving at a time when the UK fintech sector is facing a critical crunch point.
The UK currently holds more than 10 per cent of the global market share in the fintech space, yet the recent departure from the EU has instantly cut our ‘accessible’ market from 450 million to 60 million. Throw a global pandemic into the mix and you end up with a sector that needs a clear vision from the government, along with support measures to truly cement the UK’s position as a leading global fintech hub.
After weeks of rumours circulating, what did we learn from the report?
- Policy and regulation – Kalifa proposes the development and adoption of common data standards, a recommendation that will be met with open arms by the fintech community. The report also priortises the use of smart data, encouraging more communication between fintechs and traditional institutions. Kalifa hopes this will accelerate the adoption of Open Banking and Open Finance
- Skills – since leaving the EU, retaining and attracting talent has been one of the main areas of concern for fintech leaders across the UK. To address this, Kalifa proposes a new visa stream to enhance access to global talent for fintech scaleups. Looking within the UK, retraining workers through a series of fintech education courses will bring the UK workforce up to speed with new innovations
- Investment – the suggestion of creating a £1 billion “Fintech Growth Fund” to help firms scale is likely to grab most of the headlines, with Kalifa also highlighting that there is £6 trillion sat in private pensions which could be put to use to further the growth of the UK’s fintech sector
- International – following the recent introduction of the government sponsored Fintech Bridges, Kalifa now wants to see an international plan for fintech, one which identifies sectors and markets with the highest potential to scale and build leading positions for UK fintech companies
- National connectivity – we know that there are hundreds of innovative fintechs across the country, yet 99% of the attention is on London. Kalifa wants the government to create new regional fintech hubs, bringing in investment to other parts of the UK to accelerate growth and champion the fintech leaders that are being built outside of the capital
All of these recommendations will be music to the ears of fintech leaders. The priorities Kalifa has outlined reflect the conversations we, at Vested, have with founders on a daily basis. For years they have been calling for more support from the government, greater collaboration with traditional institutions and concrete recommendations to address concerns around Brexit. Like with any strategic report, the proof will be in the pudding. If the plan delivers the goods, we can expect to see a bright and exciting future for fintech in the UK.