UK can't 'rest on laurels' over fintech, government told
A landmark review into the UK's booming fintech sector has said Britain "cannot rest on our laurels" and urged the government to make key reforms to help the sector keep growing post-Brexit and COVID.
The Kalifa Review, published on Friday, sets out a five-point plan to help Britian's £11bn ($15.3bn) fintech — financial technology — sector continue to thrive. The plan makes recommendations covering policy, regulation, skills, connectivity, talent, and investment.
Ron Kalifa OBE, the former chief executive of Worldpay, led the review. He said fintech would be "essential to our recovery".
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"Britain has a proud record of starting-up and scaling-up some of the best known fintech products, but we cannot rest on our laurels," Kalifa said in a statement. "The next powerhouses will not be created by accident.
"We must continue to nurture our start-up culture, but crucially we must also give our high growth firms the support to become global giants."
Fintech emerged in the wake of the 2008 financial crisis as one of the most exciting growth areas and London has become an international hub for the industry, accounting for 10% of the global market. The sector covers everything from digital banks like Monzo and Revolut to payment companies such as Checkout.com and regulation businesses like anti-money laundering service Complyadvantage.
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Kalifa was appointed by the government last year to lead an independent review of the sector and to make recommendations on how to maintain the UK's leading position.
His 108-page report calls for reforms to help maintain momentum and enable promising businesses to grow. Suggestions include: calls for a "fintech scale up visa" to attract international talent; reform of UK listing rules to allow dual class shares that would make London a more attractive location to IPO; establishing a £1bn "growth fund"; and establishing a Centre for Finance, Innovation and Technology to coordinate the sector and help companies grow.
"With the right reforms that encourage entrepreneurialism, investment and make it easy to attract and invest in talent, Britain can usher in a period of dominance that can help us build back better from Covid-19," Kalifa said.
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Chancellor Rishi Sunak said the review made "an important contribution to our plan to retain the UK’s fintech crown".
"We must now build on our global reputation for fostering innovative start-ups and ensure firms can access the talent, finance and support they need to scale up here in the UK," he said.
The Treasury said it would review the report's recommendations and respond in due course.
Industry figures greeted the report's recommendations. Charlotte Crosswell, chief executive of fintech lobby group Innovate Finance, said the report was "a vital intervention that has the potential to set the strategic direction of UK fintech for decades to come".
"The UK attracts the founders behind some of the world’s most innovative businesses, so we must show that we remain an ambitious partner in a sector where we have been at the forefront of global thought leadership," she said.
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Senior leaders and founders of some of the UK's biggest fintech businesses welcomed the report, including Monzo, Wise (formerly TransferWise), Funding Circle, and Checkout.com. Kristo Käärmann, Wise's CEO, said the report was "a brilliant opportunity to keep modernising the regulatory environment."
Senior leaders said continued access to talent post-Brexit was a key issue for the sector.
"The creation of a new visa stream is an invaluable step towards protecting the strong talent pool that is the backbone of UK fintech’s success," said Catherine Birkett, chief finance officer of GoCardless.
"This would ensure that startups and fast-growth businesses like ours can continue to fulfil their ambitious growth and innovation goals, ultimately supporting economic growth.”
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