Innovate Finance, the independent membership association that represents the UK’s global fintech community, alongside WPI Economics, released a report on the potential effects of future changes to the country’s immigration policy on the UK fintech sector.
The report provides new insight on the scope of the UK fintech sector, which currently represents 76,500 employees, of whom 42% are from overseas (28% from EEA countries, and 14% from non-EEA countries). The report also forecasts that on current performance, the sector is set to grow to more than 100,000 employees, and the number of UK fintech companies more than double to 3,300, by the year 2030. However, 82% of companies say they already face difficulties in recruiting non-EEA migrants. Under the most likely scenario for future immigration policy, in which the system for EEA migrants moves closer to that for non-EEA migrants, the report predicts a shortfall of 3,200 highly-skilled workers by 2030, at a cost to the UK fintech sector of £361m.
As Charlotte Crosswell, CEO of Innovate Finance, said: “Without a flexible approach, the UK fintech sector stands to lose its global pre-eminence with fintech companies already facing challenges in recruiting appropriate skills and talent. However, the potential size of the loss has not yet come to pass and, if managed correctly, may not materialize.” Catherine McGuinness, Policy Chairman of the City of London Corporation added: “As the financial services sector increasingly turns to technology to shape its future, it’s essential that the UK is able to attract international talent to unlock the full potential of this thriving industry.”
Innovate Finance is proposing six policy principles as a foundation to develop a proportionate policy response and mitigate the impact of uncertainty on the fintech sector, which are:
- A call for a flexible approach to the development of one immigration system that demonstrates complementarity between international talent and the UK’s local skills base for fintech;
- Recognition by the government that fintech is not just a beneficiary, but a driver for enabling a future migration system which benefits the entire UK economy, potentially providing the solutions to many of the operational difficulties the current system faces;
- Support for smarter methods of sponsorship that will enable costs to smaller fintech companies to be reduced;
- Recognition that the definition of ‘highly-skilled’ is not necessarily based on academic achievement, but a more sophisticated analysis of experience;
- An undertaking that the UK should continue to assess key skills to evaluate where the gap in digital skills exists, creating a mechanism for training local talent;
- A call for continued investment into education that reflects the changing digital nature of the UK economy by ensuring this is reflected in the curriculum.