Earlier this week, Liz Truss succeeded Boris Johnson as the UK’s Prime Minister, beating rival Rishi Sunak in the race to become leader of the Conservative Party. But what does her appointment as mean for the UK fintech community? The industry shares their views.
Simon Cureton, CEO, Funding Options
“We welcome Liz Truss’ evident passion for the City as a ‘jewel in the crown’ and trust that she has the fintech community in mind as much as the incumbent institutions as she sets out her economic agenda in the months that follow.
“When Sir Ron Kalifa’s Review of UK Fintech was published last year, she recognised there are many opportunities to make the UK the epicentre of financial innovation and pointed to boosting our presence in global markets, something we hope she takes with her from the foreign office.
“There are reasons why the UK’s financial sector is so admired overseas, not least the rule of law, regulation and expertise that resides within the Square Mile and beyond. Her promised ‘war on technocrats’ should be handled with care, but this represents a chance to position the UK as a leader in realising the benefits of open banking and embracing the technologies that will make lender decision-making faster and more robust than ever.
“We face a global funding gap, only exacerbated by the energy crisis, and SMEs remain central to every world economy. The more we do to foster an environment in which small businesses are helped and not hindered, the better it will be for the UK, business owners, and the fintech community’s ability to export its prowess to other major economies.”
Romi Savova, CEO, PensionBee
“Newly appointed Prime Minister Liz Truss will have a multitude of immediate decisions to make, in order to bring certainty and stability to businesses and consumers alike, at this tumultuous time.
“As we are experiencing a supply-side problem, I would urge the new Prime Minister to prioritise policies that support consumers and businesses in the short term, instead of measures that kill demand.
“It’s imperative for the government not to tip the economy into an unnecessary recession by raising taxes. The new Prime Minister should not be afraid to borrow a bit more; and choose versatile short-term policy measures that are quick to implement but equally quick to reverse, such as cutting VAT.
“Under this latest administration, I hope the new Minister for Pensions and Financial Inclusion will focus on putting consumers back at the heart of pensions, by finally legislating a 10-day pension switch guarantee.
Chaim Hack, head of business development, Coremont
“Actions always speak louder than words and in the coming weeks and months we will get some clues as to what agenda the new Conservative government will put in place and how it will support the fintech sector.
“Whether it is Chase digital bank setting up in Birmingham or local firms such as Revolut growing at pace, the UK fintech sector still has huge unearthed potential. Indeed UK fintech companies received £7.6billion in funding during the first half of 2022, the second-largest globally after the £20.8billion raised by US firms.
“Furthermore, data compiled by industry body, Innovate Finance, showed that for the first half of the year, global fintech investment reached £57.6billion. The opportunity to turbocharge the fintech industry and grow it significantly more is there – now it is down to PM Truss to enact the policies.”
Thomas Tudehope, global head of public policy, Luno
“Luno looks forward to working with Ms Truss and her team to design a regulatory framework for crypto which will boost economic growth, create thousands of jobs and protect consumers.
“As set out in our recent response to Parliament’s inquiry into the crypto sector, Luno believes there is an urgent need to develop and implement a regulatory framework that protects consumers, ensures all crypto companies operate at the highest standards, and enables British firms to plan with the certainty that is required if we are position the country as a world-leader in the digital asset ecosystem.”
Bo Brustkern, CEO, Fintech Nexus
From a regulatory perspective, our thesis continues to play out well: the UK is (still) among the most hospitable places to build innovative financial technologies.
“If Liz Truss is taking the economy seriously (no doubt about that!), then embracing the ‘new new’ fintech — aka crypto, aka Web3 — may be a move that she’s willing to take.
“An assertive move in this direction would define the next decade of financial innovation (and beyond) for the UK, and without a doubt would help cement London’s place in the world’s changing financial order.”
“Innovate Finance would like to offer many congratulations to the new Prime Minister Liz Truss on her appointment. We look forward to continuing to work with her and the government to further strengthen the UK’s position as a world-leading fintech hub, and to realise the full potential of fintech to create a more democratic, inclusive and effective financial services sector that works better for all.
“The fintech ecosystem has valued and benefited from the UK Government’s strong support over the years. However, there is still more to be done to ensure we unlock the full potential of innovation to create a better financial services sector for everyone, and as such it is imperative that we keep up the current momentum.”
Simon Taylor, head of strategy & content, Sardine, and co-founder at 11:FS
“UK fintech has a reputation as one of the most exciting globally. But with a new Prime Minister, Liz Truss will that get better or worse? The UK fintech sector boomed with early consumer fintech companies like Wise, Revolut, Monzo and Starling capturing global attention, and massive payments companies like Checkout reaching multi billion dollar valuations in the past decade.
But post Brexit, the UK had four key issues: access to talent, access to growth capital, access to the European market and regulator responsiveness/openness. So will Liz Truss change things?
1. World view matters
Liz Truss won her party support by promising low taxes and support for business. I read this as being more supportive of ‘the city’ than fintech companies disrupting it. I hope I’m wrong on this, because the fintech industry can be a growth engine.
2. There’s low-hanging fruit to deliver
The Khalifa Review published in Feb 2021. It set out policy recommendations on talent, capital and listings. Most of those have not been implemented. Government has been frozen by Brexit, the pandemic & now leadership changes & Ukraine. Time to deliver.
3. Crashing regulators together might not solve anything
Truss wants to merge FCA, PRA and Bank of England into one. This move might make life simpler for some in big finance, but I struggle to see it as any more than a cost saving move. Compared to the US the UK regulatory environment is incredibly simple.