The UK government has kicked off a six-month independent review of the country’s financial technology (fintech) sector, following a delay caused by the coronavirus pandemic. The review’s significance has grown since the outbreak of COVID-19, with the government citing fintech as being “vital” to the UK’s economic recovery.
The Fintech Strategic Review was announced in March in chancellor Rishi Sunak’s debut Budget. It is being led by Ron Kalifa OBE, a former chief executive of international payment processing company Worldpay, and aims to identify priorities for regulators and policymakers, as well as industry.
The pandemic has shown “there is further work to be done to increase mainstream adoption of technology solutions, and to enhance the resilience of UK fintech”, according to a three-page document outlining the review’s terms of reference.
The review has five workstreams: skills and talent, investment, national connectivity, policy, and international attractiveness. The report will provide recommendations on each workstream and address three objectives: ensuring UK fintech has ‘the resources to grow and succeed’, encouraging ‘widespread adoption of fintech solutions’, and ‘maintaining and advancing the UK’s international reputation’. The report is scheduled to be presented to HM Treasury at the start of 2021.
Fintech sector ‘vital’ to economic recovery
The UK is seen as a global leader in fintech, with the sector estimated to be worth £7bn (US$9bn) and to employ around 60,000 people. But challenges include the economic crisis caused by coronavirus, as well as the prospect of the transition period for the UK’s departure from the European Union ending in December without a deal between negotiators.
“The UK is one of the leading places in the world to start and grow a fintech firm, and I am determined to ensure this continues,” said economic secretary to the Treasury and City minister John Glen, as he launched the review. Citing the sector’s worth to the economy, he said it would be “vital in ensuring both that the country bounces back post-coronavirus, and continues to be at the forefront of financial innovation now we have left the EU”.
Worldpay founder Nick Ogden, who now chairs fintech firm ClearBank, welcomed the review getting underway but said its start came “15 or 16 weeks too late”, according to Financial News. “They [the government] haven’t embraced the fintech sector as well as they could have done to help deal with the crisis that the country faces,” Ogden said.
Aiming to accelerate ‘tech-based solutions’
The review’s governance board’s first meeting took place on 20 July, attended by Glen. Its secretariat is being led by industry body Innovate Finance and the City of London Corporation, which is the City’s municipal governing body.
Kalifa, who was awarded an OBE in the Queen’s New Year 2018 Honours List for services to financial services and technology, was chief executive of Worldpay for more than 10 years until 2013, remaining as an executive director until February 2020. He is chairman of payments company Network International and online learning platform FutureLearn.
“Tech-based solutions in financial services have experienced widescale adoption, with growth fuelled by a favourable start-up environment,” he said. “This review will ascertain what is required to accelerate this change, to create a financial services ecosystem that is above all, sustainable, inclusive and world-leading. Technology has a vital role to play in the UK’s COVID-19 economic recovery. The fintech review will ensure that we can leverage this innovative technology to help consumers and businesses, through a joined-up strategy that combines investment, skills and policy to deliver it.”
In March’s Budget, the government also said it would “tour the regions and nations of the UK to showcase its diverse range of fintech firms” and “extend funding” for the Fintech Delivery Panel, which was set up in 2017 by tech entrepreneurs network Tech Nation at the request of HM Treasury.
An HM Treasury spokesperson told Global Government Forum that “engagement with fintechs throughout the regions of the UK remains a priority and we are exploring opportunities for engagement, while considering the implications of COVID-19”. The Fintech Delivery Panel’s funding extension covers the period 2020-2022.