HM Treasury (HMT) has given its support to a five-point ‘pledge’ – billed as a world first – that aims to improve the way banks and fintechs work with each other.
The Fintech Pledge has been developed by the Fintech Delivery Panel (FDP), which comprises representatives from fintech companies and the UK’s five largest banks, with backing from HMT.
Banks and fintech companies are increasingly looking to partner, and the FDP sees the pledge as an important step in formalising the processes by which banks start working with (‘on-boarding’) smaller fintechs.
The five principles are: to provide clear guidance to tech firms on how the on-boarding process works through a dedicated online landing page; to provide clarity to tech start-ups on their progress through the on-boarding process; to provide a named contact, guidance and feedback; to encourage good practice and improvement; and to commit to implementing this process six months from signing the pledge, and providing bi-annual feedback during the first year.
Barclays, HSBC, Lloyds Banking Group, NatWest Group and Santander are the five banks to have signed the pledge.
“The UK is already the best place in the world to start and grow a fintech, and we’re committed to that remaining the case as our economy bounces back. So I welcome the Fintech Pledge from some of our leading banks and look forward to more firms becoming signatories,” said John Glen, economic secretary to the Treasury.
Pledge ‘provides welcome clarity’
The FDP was established three years ago by entrepreneurs network Tech Nation at the request of HMT. Current priorities include the challenges and opportunities to fintech presented by COVID-19, as well as the UK’s exit from the European Union.
The ‘Fintech Pledge’ is detailed on a four-page document published by Tech Nation on 14 September. This explains that the pledge follows the creation of ‘fintech onboarding guidelines’, produced in collaboration with banks, fintech companies and the British Standards Institution, almost two years ago.
“Building partnerships with established institutions is a fantastic route for fintechs to drive positive change in finance, be it underpinning new customer solutions or transforming regulatory reporting. The Fintech Pledge provides welcome clarity, setting out clear commitments of what fintechs can expect and how best to create productive collaborations,” said Victoria Roberts, who recently became the FDP’s director. Roberts has formerly worked for insurance giant Aviva, as well as in the civil service.
Review of fintech sector underway
The UK government recently kicked off a six-month independent review of the fintech sector, following a delay caused by the pandemic.
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 contains five workstreams: Gerard Grech, chief executive of Tech Nation, is examining ‘national connectivity’; Sherry Coutu, chair of SVC2UK (which stands for ‘Silicon Valley Comes to the UK’), is looking at ‘skills and talent’; Anne Glover, co-founder of Amadeus Capital Partners, picks up ‘investment’; Kay Swinburne, a former Conservative MEP now working in the private sector as vice-chair of financial services at KPMG is concentrating on ‘policy’; and Omar Ali, managing partner for UK financial services at EY, is focusing on ‘international attractiveness’.