With huge changes at the top of Government and right through Cabinet, new faces are, of course, already developing new policy directions for the country. There’s a lot of expectation for this new Government, and major fiscal announcements have already shown
they want to make change. We’ve seen the Prime Minister has committed to supporting “the City”, but this must include the fintech sector, and not just the Square Mile.
The previous Government made good progress with the Kalifa Review, and its UK Listings Review, to make London an even more attractive destination to invest in the sector.
But momentum has significantly slowed down.
With a new Government, new Cabinet and new Ministers, we need a fresh approach: now is the time to build on existing achievements to truly cement the UK’s role as a leading global fintech hub.
1. Boost global support of UK fintechs
The UK Government has a huge opportunity, and responsibility, to support the growth of UK fintech companies globally. Our financial services system is unparalleled and we have a regulatory regime that is amongst the most innovative in the world.
We only need to look back to 2018, when Wise became the first tech company to obtain a settlement account with the Bank of England and secure direct access to the Faster Payments System (FPS) in the UK. This allowed customers access to an uninterrupted 24/7
payments service which allowed payments to move instantly, at far lower cost, and with far less risk. This was a monumental change in process – and it was the boldness of the Bank of England and the UK’s policy making machinery which enabled that success.
The Government needs to champion this, and focus on sharing these best practices globally. The Government should be engaging with central banks and regulators across the world to demonstrate the benefits of its innovations, and showcase the strength of its
fintech sector as a result. Building these relationships, and introducing UK fintechs to their counterparts in other markets, will support international expansion and support Britain’s financial economy.
Such commitment to supporting the UK’s burgeoning fintech sector will undoubtedly see the industry continue to grow, and take the next step in leading the world in financial innovation.
2. Streamline communications across Whitehall
Good cross-departmental communication is key to ensuring fintech policy is developed and delivered at pace. Currently, there are dedicated fintech teams spread across HMT, DCMS, BEIS and DIT – all working to drive forward policy developments in the sector.
While this is great for specialised knowledge, it’s important that those specialists sing from the same hymn sheet.
A Whitehall-wide strategic approach to supporting the sector would help achieve this. Setting clear government objectives for support beyond the Kalifa Review, which is then shared across departments, would hugely improve the pace and significance of the
work being delivered. This should be coupled with a proactive engagement strategy with the whole fintech industry. It would mean the sector feels truly included in the policy development process. It would also allow departments to utilise the expertise of
different companies to guide forward-thinking policy.
This would ensure that new rules and opportunities come into force quicker and more efficiently, while also being sure to promote innovation, growth, and attract investment for the industry.
3. Finally, it needs to do more to feed the lifeblood of the fintech sector: talent
Since Brexit, talent has been noticeably harder to access and attract to the UK. With technology companies clamouring for growth, developers, analysts, product managers, technical engineers and many other roles are more in-demand than ever. In order to continue
building a world-class fintech industry in Britain, we need to ensure we have access to talent that will enable us to create and grow world-class businesses.
The new scale-up visa regime, borne out of the Kalifa Review and launched earlier this year is a positive start, but we need to go further. The Government should urgently consider more flexible options through the visa system to help address the real skills
shortage the sector is currently facing. While that would address the immediate issue, there is a longer term concern around the domestic talent pool that the tech and fintech sector desperately needs. A long-term strategy to invest in tech education across
all age groups, from school to university, could be instrumental here.
This should be a top priority if the UK is to remain a leader in fintech. If not, we risk being overtaken by markets with a glut of skilled tech talent.
The new Prime Minister has an unenviable list of immediate policy and political challenges to face, but that shouldn’t stop her government from considering the long-term health and prosperity of one of its key growth industries.
Over the course of her premiership we must see a renewed enthusiasm and focus in supporting UK fintechs, and the start-up sector more broadly, to ensure the backbone of British entrepreneurialism and innovation continues to thrive.