City of London Corporation - Action needed for the UK to lead in fintech
UK fintech will continue to grow and lead the world if a number of recommendations set out in a City of London Corporation report today are adopted by industry and Government.
The ‘Value of FinTech’ report, commissioned by the City of London Corporation and produced by KPMG, outlines 10 recommendations to help make sure the UK maintains its status as a global fintech leader.
Fintech in the UK contributed £6.6bn to the economy last year and employs over 60,000 people. Developed financial markets and readily available capital and investment, Government backing and engagement, a predictable and sound regulatory environment, talented workers and world-class infrastructure are all cited as reasons for the UK’s position.
The major recommendation of the report is that fintech secures a sector deal which will make sure the UK has a single and consistent policy position backing the sector. Sector deals, announced in January 2017 as part of the Government’s proposals for a modern Industrial Strategy, would see sectors better supported through policy, regulation, funding, capital, infrastructure and talent.
Additional recommendations of the report include:
- Providing clarity on the regulatory perimeters applicable to fintech and the technologies they use.
- Replicating the success of the regulatory sandbox by making it easier for fintechs to gain authorisation and regulators working with them at an early stage in their development
- Regional and local government, as well as local enterprise partnerships, embracing the potential of fintech and also identifying regions and cities where fintech can be clustered.
- Financial services trade associations should work in partnership with fintechs and the Government should explore a match-making programme to accelerate their growth. 81 percent of financial services firms say their future approach to fintech will be through partnerships.
- Government introducing measures so they can unlock institutional markets and reviewing how best to ensure the UK retains and attracts the best talent post-Brexit.
Catherine McGuinness, Policy Chairman, City of London Corporation, said:
“Fintech is a real asset for the UK’s economy and we are a global leader in our own right. The City has supported this growth and we have seen the services provided move on from traditional banking services to other forms of financial services like insurance, asset management, capital markets and regulation.”
“It is the latest evolution of financial services and while there is a lot of focus on the customer end provided, businesses, not just those in financial services, need to embrace it too.”
“I hope that industry and Government seriously consider these recommendations in this report, especially the possibility of a sector deal. If they do then I am sure that fintech will continue to go from strength to strength in the years to come.”
Paul Merrey, Strategy Partner, KPMG UK, added:
“Fintech is valuable for customers, businesses and society. Today’s report highlights the key areas fintech is making a difference, including improving financial inclusion, customer experience and transparency.
“Many countries are now taking steps to attract and retain fintech companies. A sector deal would be a major boost to the UK’s ability to maintain its status as a global fintech leader.”
Charlotte Crosswell, CEO, Innovate Finance, said:
“FinTech continues to grow and thrive in the UK with London widely recognised as the number one ecosystem globally. To maintain our leading position, Innovate Finance looks forward to promoting the sector and supporting government and regulators to continue to attract investment and talent. As highlighted by this timely and valuable report, collaboration across the industry, supported by government, is critical in ensuring the UK maintains its leading global position.
“We look forward to working with the City of London Corporation and partners in Government to ensure the recommendations in this report are delivered, not just for the benefit of our members but the wider UK FinTech sector.”
Notes to editors
- The full report can be found here